On March 4th, the right of the Federal Government to collect taxes until 2035 had been confirmed by Swiss voters, with an appalling majority. This is a peculiar feature of Switzerland’s political system: as established in the Swiss constitution, the government has to seek voters’ approval on tax collection periodically. Yesterday, a striking majority of 84.1% of voters confirmed the government’s right to levy personal and company taxes, including the Value Added Tax (whose rates have been recently amended, as reported by Goldblum and Partners). The turnout was 54.4%. A rejection would have been quite unlikely. In the words of Finance Minister Ueli Maurer, it would have implied “a total meltdown”, as “ the Swiss government wouldn’t have enough funds”, given that the chance of finding another source of revenue to fund public expenses would have been highly implausible in the short term. In fact, the value at stake equalled ⅔ of the government tax revenue, which in 2016 totalled approximately CHF43.5 billion. Opposition to the referendum has been almost non-existent and most of the parliamentary discussions focused on the opportunity to shorten the term to 10 years, or rather to extend it indeterminately. In 2004, in the most recent tax referendum of this sort, 73.8% of Swiss voters confirmed the right of the government to levy taxes. In Switzerland, taxes can be levied at the federal, cantonal and municipal level. Originally, the cantons owned the main fiscal power – and the federal government started collecting taxes only in 1917 to fund the war budget during WWI. Please use our Swiss Taxes 2018 comparison for the following information.
Legal disclaimer. This article does not constitute legal advice and does not establish an attorney-client relationship. The article should be used for informational purposes only.