Bulgaria's center-right government has dropped plans for a health tax hike, which was approved last week amid doctors' walkouts and in a bid to raise additional funds to support the ailing system.

“The health tax will remain at 8% by the end of the year,” Finance Minister Simeon Djankov announced at a press conference on Monday, adding that the government is expected to back the alternative solution, which would make state officials, who are currently making no health insurance installments, dip deeper into their pockets.

The cabinet of the ruling GERB party approved last Wednesday a 2 percentage-point rise in health insurance levies to 10 percent of an individual's income, effective from April.

The private sector cried foul, saying that the measure will deal a heavy blow to the companies, which are already struggling in these times of crisis and will create conditions for the expansion of the grey economy.

“The finance ministry has no figures about the shortage of funds at the National Health Care Fund,” Minister Djankov said, commenting media reports that increase in the health care tax will raise additional BGN 300 M.

He stressed that urgent analyzes should be done on how the money for the health care system is being spent and where there are leakages.

According to the minister the installment of health care taxes by the employees in the state sector will raise BGN 150 M thanks to cuts in the budget spending.

He reiterated his opposition to unblocking the reserve of the health care fund, which is part of the fiscal reserve and may fuel the budget deficit.

Earlier in the day Lachezar Ivanov, head of the parliamentary health care commission, commented that after this tough decision has been taken the government will be looking for other ways to collect more revenues for the National Health Care Fund.