Prague - Services in beauty parlors and restaurants could be soon much cheaper.

Czech coalition government approved a bill on Monday which lowers the value added tax (VAT) from 19 percent to 9 percent in some sectors.

These include small repair services of bicycles, shoes, leatherware, textile furnishings and clothes, window cleaning and household cleaning, hair salons and home nursing services.

„Restaurants are included in this category too and the lower VAT will have the biggest impact in this sector," Finance Minister Miroslav Kalousek said, adding that the measures will not apply on alcohol and tobacco goods.

The reduced VAT rate will also apply in housing, such as renovation and repair of private dwellings, but not the construction material.

Kalousek is adamant that the bill will boost employment in all regions. "There are restaurants, barbers and window cleaners in all regions," Kalousek said, believing they all appreciate the reduced VAT rate.

The bill will be have to be approved by both chambers of the Parliament and signed by President Klaus before it is enforced but no major obstacles are expected. On Friday President Klaus signed a lower VAT rate for VAT paying businesses for the purchase of new cars.

Brussels ahead of ČR

The Economic and Financial Affairs Council (Ecofin), chaired by Czech finance minister Miroslav Kalousek  reduced the VAT rates in some sectors some weeks ago.

What more, in 18 EU countries the lower VAT has been already enforced.