Swiss Business Federation Fears Loss Of Competitiveness On Tax
by Ulrika Lomas, Tax-News.com, Brussels
30 November 2004

Switzerland risks being left behind on tax unless a more dynamic approach to the issue of cross-border tax competition is taken, the Swiss business federation, Economiesuisse, has warned following the publication of a study into comparative international tax rates.

Speaking to the Swissinfo news service, Pascal Gentinetta, co-author of the study entitled ‘Competition and Dynamism in Tax Policy – an international comparison of major reforms and their lessons for Switzerland’ highlighted that corporate tax rates in particular have become very fluid in recent times, adding that Switzerland cannot simply afford to cling to its existing tax system.

“Many countries are engaging in often very ambitious reforms of their taxation systems, and we found that, while the Swiss position is not so bad comparatively, it is clearly lagging behind to a certain extent,” observed Mr Gentinetta.

Noting that Swiss voters rejected proposals for tax reform earlier in the year, Gentitta urged Switzerland to break out of its current “tax policy paralysis” and seek to take advantage of its “tax autonomy” in relation to the European Union.

The study concluded that that Switzerland’s lead in taxation in recent years has now diminished and the country’s personal tax regime was now “no more than average” in international terms.

To help Switzerland increase its competitive edge, the report proposes the elimination of “economic double taxation” in the areas of shareholder capital and wealth, and the maintenance of tax incentives for multinational companies.

Switzerland’s low rate of VAT is also seen as a considerable competitive advantage that should not be removed “on any account.”

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