Jakarta, hitclubapk3 Indonesia
—
Government
China
will wear
tax
value added (VAT) on drugs and contraceptives, incl
condom
, for the first time in nearly 30 years.
This policy is part of Beijing’s strategy to reverse the trend of decreasing birth rates which has the potential to suppress the rate of economic growth.
Quote
Bloomberg
, Friday (19/12), in the revision of the Value Added Tax Law, consumers will be subject to VAT of 13 percent for contraceptive products which was previously exempted since 1993.
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This tax-free policy was implemented when China still implemented the one-child rule and actively controlled births.
These revised tax rules will come into effect in January 2026. At the same time, the government is providing new incentives by exempting VAT for childcare services, from daycare to kindergarten.
Apart from childcare services, tax exemptions are also provided for care services for the elderly, people with disabilities, as well as various services related to marriage.It is hoped that this policy will ease the burden on families and encourage the formation of new households.
The move reflects a change in direction of China’s demographic policy.The country with the second largest population in the world is now shifting from birth restrictions to active efforts to encourage people to have more children.
In the last three years, China’s population has continued to shrink.In 2024, the number of births will only reach 9.54 million babies, a far decrease compared to nearly 18.8 million births about a decade ago when the one-child policy was lifted.
The Chinese government has previously launched various pro-natal policies, including providing cash assistance, improving childcare services, and extending maternity leave and paternity leave.
Beijing also issued guidelines to reduce the number of abortions that are not considered medically necessary.
However, these efforts face major challenges due to the high costs of raising children.
“The removal of the VAT exemption is more symbolic and unlikely to have a major impact, but reflects efforts to shape a social environment that encourages births and reduces abortions,” said YuWa Population Research Institute demographer He Yafu.
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