China Implements Condom Tax, Childcare Exemptions to Encourage Births

Beijing – In an effort to combat declining birth rates, China implemented a new tax system on January 1st that includes a 13% sales tax on contraceptives while exempting childcare services from value added tax (VAT), according to BBC News. The overhaul of the tax system, initially announced late last year, aims to address the country's aging population and sluggish economy.

The changes remove many exemptions that had been in place since 1994, a period when China was still enforcing its one-child policy. The new tax structure also exempts marriage-related services and elderly care from VAT.

These tax adjustments are part of a broader initiative by Beijing to encourage larger families. The government is also extending parental leave and issuing cash handouts to incentivize childbirth.