Condoms are about to be taxed, and Durex, known for its witty marketing, might be the hardest hit.
With just over half a month left until New Year's Day 2026, many things will change with the arrival of the new year. One change that many people are silently concerned about but hesitant to discuss openly is: condoms will be taxed.
From January 1, 2026, the sale of contraceptive drugs and devices will be subject to value-added tax (VAT), and will no longer enjoy tax exemption. This means that the tax exemption policy that has been in place for over 30 years since 1993 will officially end.
The condom industry, represented by brands such as Durex and Okamoto, has seen sales decline for four consecutive years in mainland China since 2020. Against this backdrop, the imposition of taxes is coming. This may trigger various speculations. For example, is this a policy signal in the context of declining birth rates? Or is it a shift in direction for a specific industry? From the perspective of consumer research, is the "low-desire society" already seen in neighboring Japan getting closer?
The condom market is a small window into contemporary consumer society, behind which lie various undercurrents of changing consumer relationships that cannot be ignored.
Not a new signal for population policy
According to my research, it is clear that the taxation of condoms is not a new signal of a shift in population policy. The specific reasons are as follows:
First, the origin of this matter is not due to any new policy targeting contraceptives, including condoms, but rather stems from the upcoming full implementation of the "Value-Added Tax Law of the People's Republic of China." The new law replaces the original "Interim Regulations on Value-Added Tax," representing a step towards tax system standardization. The new law does not retain the exemption for "contraceptive drugs and devices," thus automatically reinstating taxation.
The "Value-Added Tax Law of the People's Republic of China" was adopted by the Thirteenth Session of the Standing Committee of the Fourteenth National People's Congress of the People's Republic of China on December 25, 2024, and is hereby promulgated, effective from January 1, 2026. In other words, this matter was determined at the end of 2024. At that time, the "Interim Regulations on Value-Added Tax of the People's Republic of China" (hereinafter referred to as the "Regulations") will be repealed. Article 15 of the "Regulations" stipulates that "contraceptive drugs and devices" are exempt from value-added tax, while Article 24 of the "Value-Added Tax Law" no longer includes this item in the list of items exempt from value-added tax. Regarding the impact of this adjustment on population policy, Zhai Jiguang, an associate professor at the School of Civil, Commercial and Economic Law of China University of Political Science and Law who participated in the legislative drafting process, told Sichuan Online, "This change will not have a significant effect on encouraging childbirth, but all policies should be consistent with the basic national policy." Zhai Jiguang explained that, in the face of demographic changes, the future policy direction is to encourage and reward childbirth, and the removal of the value-added tax exemption on contraceptives is part of this.
In fact, the decline in China's population in recent years is due, on the one hand, to the continuously falling marriage rate. According to statistics from the Ministry of Civil Affairs in 2024, 6.106 million couples got married, a decrease of 1.574 million compared to 2023, a drop of 20.5%, setting the lowest record since 1980. On the other hand, there is another reason that many people are reluctant to mention: the infertility rate.
Research data shows that, from the perspective of newborns, in 2022, IVF babies accounted for about 3% of the total number of newborns, and this proportion rose to 4%-5% in 2024. The penetration rate of IVF among couples of childbearing age jumped to 8%-12% in 2024, and exceeded 15% in first-tier cities. Therefore, relevant national departments have discussed including assisted reproductive technology in medical insurance. Reports citing a survey by the China Population Association indicate that more than 50 million couples of childbearing age in China suffer from infertility, accounting for 12.5% to 15% of the childbearing population, while less than one million patients receive assisted reproductive technology, with a penetration rate of about 10%.
