Czech health reforms include drug tax hike

The Czech Republic's Chamber of Deputies has narrowly approved the government's public sector reform package. which includes health care charges. The vote was carried by 101 votes to 99 with the help of two opposition members.

The reforms are designed to reduce the national budget deficit, which is considered crucial for the country's prospects of adopting the euro as its currency. On the fiscal side, a flat tax equivalent to 23.1% of income will replace the existing four-level system and incorporate social security payments. Value-added tax for certain goods, including drugs, will be raised from 5% to 9% in 2008 and patient charges levied of 30 koruna ($1.47) per physician visit.