Válek: The health care industry will save 3.2 billion CZK through VAT changes proposed by the government

Update: 12.05.2023 11:22

Prague – According to Minister of Health Vlastimil Válk (TOP 09), the healthcare industry, especially hospitals, will save 3.2 billion crowns by reducing the value added tax (VAT), mainly on medical devices. Health insurance companies, on the other hand, will pay an extra 1.5 to two billion crowns for drugs with higher VAT, he said at today’s press conference. An increase in VAT on medicines and a reduction in medical devices are part of the consolidation package presented by the government on Thursday.

VAT on medicines is currently ten percent, it is proposed to increase it to 12 percent. Medical devices, which are all used materials from bandages to wheelchairs, and medical devices, which are currently taxed at 21 percent, will also fall to the lowest VAT rate from 15 percent.

“Health care will save 3.2 billion in total, because although some things go to 12 percent, the vast majority of things go from 15 to 12 percent,” Válek said. According to him, the health system spends ten billion a year on medicines and devices with a ten percent tax, and about CZK 100 billion on those with a 15 percent tax. According to him, most of the money will be saved by medical facilities. “The increase will affect the insurance companies,” he added, adding that it would be financially possible to valorize state payments for state insured persons.

Medicines will remain at the lowest rate, but it will rise by two percentage points. Overall, according to Válk, they will not cost more, but he admitted that some over-the-counter medicines may become more expensive. In the amendment to the law on health insurance, he wants to give health insurance companies the possibility of central purchase of medicines, which could lower the price. At the same time, it plans to define basic medicines, their categories, and increase the number of medicines that will be fully covered by health insurance without a co-payment, and reclassify some over-the-counter medicines as covered. “I want to be absolutely clear about the surcharges so that I can guarantee that the surcharges will not increase to an enormous amount,” the minister added.