Swiss Government Presses Ahead With Domestic Tax Changes

Ulrika Lomas, Tax-news.com, Brussels

01 March 2001

With the Swiss finance minister Kaspar Villiger announcing a major tax amnesty aimed at substantially swelling government coffers, the government now plans to give some of its revenues away in the shape of tax cuts for families and a change in the tax system for property owners.

The proposed tax changes still have to be approved by parliament, but if they are carried through, the government will be out of pocket to the tune of SFr1.4bn (US$800m). The move represents a major u-turn for the government as Mr Villiger orginally wanted to renege on proposed tax cuts due to the uncertain prospects for the Swiss economy.

The main focus of the cuts will be tax breaks for married couples and families, including benefits for childcare, and measures to reduce the cost of health premiums.

The government is also planning changes for property owners which would amount to tax deductions for houses and holiday homes being reduced. At the same time, however, the government is looking at incentives for people to acquire property.

The Swiss finance ministry said the aim of these measures was to improve and simplify the tax system and to boost Switzerland’s competitiveness for investors. It said it could cope with the lost revenue because the government collected a federal surplus of SFr4.5bn in 2000.

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