Swiss Finance Minister, Hans-Rudolf Merz, has spoken out this week to draw attention to the need for corporate tax reform, in order to benefit the country's SMEs.
Merz has argued that planned reforms to the taxation of such businesses when they restructure, and to the CGT regime, would be highly beneficial for Switzerland's small and medium-sized businesses - what he called"the backbone of the Swiss economy."
According to a report from the Swissinfo news service, Merz has claimed that the introduction of such tax breaks would provide a long term boost for the Swiss economy.
Swissinfo went on to report that the country's parliament had given its approval to the proposals, despite some objection from opposing parties, which has meant that the measures will face a nationwide vote at the end of next month.
Despite Merz's pleas for corporate tax reforms to increase competitiveness, the country's tax regime continues to receive praise,
Only last month it was announced that Switzerland was amongst the top three countries - alongside Cyprus and Ireland - in a league table of European tax systems compiled by KPMG International, in which major business organizations across Europe assessed the attractiveness of their domestic tax regimes.
All three countries were rated highly for their combination of consistency in interpreting tax legislation, stability in resisting frequent changes to tax laws, and comparatively low tax rate.
The KPMG survey showed that being in a country with an unattractive tax regime is not simply an inconvenience for business.
Almost 70% of respondents who thought their country’s tax regime was unattractive also believed that this put their companies at a competitive disadvantage when competing with foreign companies.
Commenting at the time, Sue Bonney, Head of Tax for KPMG Europe LLP and partner in the UK member firm, observed that:
“I was interested to see that a complex tax regime is seen as a hindrance to competitiveness, but relatively few people felt that a simpler system with a low rate can help make businesses more competitive. Governments across the world have been using tax as a lever to encourage inward investment for many years, but these results help to confirm that a benign tax regime is only part of the package which makes a business competitive. Good infrastructure, a high quality workforce and access to raw materials and markets are all equally important.”
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