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Bulgaria ups health tax to fund hospitals

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Bulgaria’s government voted Wednesday to raise health insurance payments in a move to end doctors’ protests and pump more money into its underfunded hospitals.

The right-wing government voted to increase monthly health payments for all citizens by 2.0 percentage points to 10 percent of their income, Finance Minister Simeon Djankov said.”This is a difficult and unpopular decision but it is also the only possible way to pump money into the severely underfinanced system without adding an extra deficit to the budget,” Djankov told a press conference.

The tax hike was supposed to be effective from January 2011 but protests this week by doctors and pressure from patients prompted the government to take action immediately. The move will put an additional 300 million leva (153 million euros) into hospitals by the end of the year, Djankov said. The proposal has to be approved by parliament and is expected to come into force in April. Bulgaria has so far avoided big budget deficits, which experts see as dangerous for the stability of its currency board arrangement with the International Monetary Fund that ties the level to the euro.

But government revenues have fallen sharply as a result of the global financial crisis, prompting the finance ministry to launch a series of cost-cutting and tax-collecting measures to balance the budget. Wednesday’s decision prompted angry protests by businesses, who accused the government of further burdening taxpayers at a time of increasing unemployment when they should be finding ways to collect more from tax evaders.

Sofia, March 10, 2010 (AFP)