Tax deductions

China Allows Tax Deductions for Child Care to Boost Births

A mother walks with her twin daughters on a street in Shanghai, China, June 7, 2021. REUTERS / Aly Song

BEIJING, July 20 (Reuters) – China will allow tax deductions for expenses for children under three years of age as part of a major reproductive policy easing to stem a dramatic drop in births in the country on most populous in the world, according to an official document released on Tuesday. .

Beijing announced on May 31 that it would allow married couples to have up to three children, instead of just two.

He abandoned a decades-old one-child policy in 2016 in favor of a two-child limit in an attempt to avoid risks to his economy from rapidly aging populations. But that has failed to generate a sustained increase in births given the high cost of raising children in Chinese cities, a challenge that persists to this day. Read more

China had a fertility rate of just 1.3 children per woman in 2020, according to recent data, comparable to aging societies like Japan and Italy and well below the around 2.1 needed for the level of replacement.

The policy document, jointly adopted by the ruling Communist Party and the State Council in June and released by the state-run Xinhua News Agency on Tuesday, set out specific measures to implement the three-child policy.

Parents who have a third child will no longer have to pay a fine or sanction by their work units. The third child will no longer face restrictions in obtaining a household registration permit, known as a hukou, or a place in schools.

In addition, expenses incurred to care for children under the age of three will be tax deductible. Local governments should give “due attention” to parents of minors who apply to rent public apartments, the newspaper said.

China will also standardize and regulate the use of assisted reproduction technologies, he said.

In May, a single decade-long census showed that the population had grown at its slowest rate in the past decade since the 1950s, to reach 1.41 billion. This heightened concerns that China would age before it got rich as well as criticism that authorities had waited too long to tackle declining births.

Reporting by Yew Lun Tian Editing by Mark Heinrich

Our standards: Thomson Reuters Trust Principles.

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