Pecohub China will impose a 13% value-added tax (VAT) on condoms and other contraceptives from January 1, ending an exemption in place since the nationwide VAT system was introduced in 1993.
The change, included in a VAT law passed in 2024 to modernise the tax regime, comes as Beijing intensifies efforts to raise its declining birthrate. VAT accounts for nearly 40% of China’s total tax revenue.
The move follows years of policy “carrots” after China abandoned its one-child policy, including allowing up to three children per couple, IVF discounts, cash subsidies, and extra paid leave for newlyweds. Still, the prospect of pricier contraceptives has drawn online ridicule. “What is wrong with modern society? They are truly going to extreme lengths just to make us have children,” one Weibo user wrote.
The new law also offers tax breaks for childcare and “marriage introduction services.” This year, the government earmarked 90bn yuan ($12.7bn) for its first nationwide childcare subsidy—3,600 yuan annually for each child under three—and announced plans to expand national health insurance to cover all childbirth-related expenses.
