The Swiss Federal Finance Department (DFF) has revealed that recent government tax initiatives are set to save taxpayers in the region of CHF2bn (EUR1.3bn) over the course of the next few years.
According to the DFF, the Swiss Federal Parliament has recently unveiled measures designed to reform the country’s existing value added tax system, to reduce the effects of fiscal drift (la progression à froid), and to provide tax breaks for families.
Measures designed to reduce the effects of fiscal drift.
According to the DFF, the government aims to reduce the effects of fiscal drift from 2011. From 2011, tax rates and deductions will be adjusted annually and linked to the Swiss consumer price index. This measure is set to reduce the tax burden on individuals by around CHF360m in 2012.
Initiatives intended to create a fairer tax system for families and married couples.
During an autumn session of parliament, the government adopted a federal law granting tax breaks for families. The new law provides that both couples with children and single parent families will, in future, be able to deduct CHF250 per child from their tax. Child care costs of up to CHF10,000 per child will also become tax deductible. This measure is thought to provide tax relief for families of an estimated CHF600m from 2012.
Determined to put an end to existing fiscal discrimination between married and cohabiting couples with joint incomes, the government has already introduced tax measures specifically designed to rectify this situation.
Simplification of the country’s value added tax (VAT) system.
From 2010, the reform of the country’s VAT law will lead to a reduction in the tax burden on individuals by around CHF200m per year. Although a temporary rise in VAT from 2011 was approved during a recent referendum held on September 27, the government is confident that this latest decision will have a minimal impact on taxpayers. The measure is due to end in 2017.
Measures taken by the government within the framework of a second reform of company taxation, adopted during a referendum in 2008, are also set to provide tax breaks of between CHF60m and CHF80m.
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