People in China will pay a 13% sales tax on contraceptives starting January 1, as the country implements changes to its tax system aimed at boosting birth rates amid a shrinking population and sluggish economy. The overhaul, announced late last year, eliminates exemptions that had been in place since 1994, when China was enforcing its one-child policy, according to BBC News Chinese.

The new tax applies to contraceptives including condoms, birth control pills, and other devices. At the same time, marriage-related services and elderly care will be exempt from value added tax (VAT). Childcare services will also be exempt from the VAT, as part of a broader government effort to encourage marriage and childbirth through measures such as extended parental leave and cash handouts.

Official figures indicate China's population has declined for three consecutive years. In 2024, 9.54 million babies were born, approximately half the number recorded a decade prior, when China began relaxing its restrictions on family size. The declining birth rate is a significant concern for Beijing, which is grappling with an aging population and its potential impact on the nation's economic growth.

The move to tax contraceptives has sparked concern among some citizens, who question the policy's effectiveness and fairness. The previous tax exemptions were implemented during the one-child policy era. The new tax policy is part of a broader effort by the Chinese government to reverse the demographic trend and stimulate economic growth. The government hopes that by reducing the financial burden on families with young children and increasing the cost of contraceptives, it can incentivize couples to have more children. The impact of the tax changes on the contraceptive market and birth rates remains to be seen.