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, removes exemptions that had been in place since 1994, when China was still enforcing its one-child policy, according to BBC News Chinese.

The new tax applies to contraceptives including condoms, birth control pills, and other birth control devices. At the same time, childcare services will be exempt from value added tax (VAT), as will marriage-related services and elderly care, signaling a broader government effort to incentivize marriage and family formation. These measures also include extending parental leave and issuing cash handouts.

China's birth rate has been declining for several years, prompting the government to take action. Official figures indicate that the population has shrunk for three consecutive years, with only 9.54 million babies born in 2024. This is approximately half the number of births recorded a decade prior, when the government began easing restrictions on the number of children couples could have. The previous tax exemptions on contraceptives had been in place for decades, intended to support the one-child policy.

The move to tax contraceptives has sparked concern among some citizens and experts, who question its effectiveness in boosting birth rates and its potential impact on reproductive health. The government's strategy reflects a multi-pronged approach to address the demographic challenges facing the nation. The impact of the new tax policies on the contraceptive market and birth rates will be closely monitored in the coming months.