Swiss Government Rejects Calls For Tax Cuts

by Ulrika Lomas, Tax-News.com, Brussels

31 August 2001

The Swiss government announced recently that it expects to post its third consecutive surplus next year due to favourable economic growth and low unemployment, but has rejected calls for further tax cuts.

Despite the expected SFR350 million ($210 million) surplus in the 2002 budget, the Government is less than jubilant. 'Given that we're in a period of strong economic growth, the surplus should really be larger,' Finance Minister Kaspar Villiger explained gloomily. 'The budget isn't out of its misery yet.'

Speaking at a news conference in Bern, Villiger warned that increased spending on education, transport, and development aid, coupled with proposed VAT cuts, could lead to deficits in 2003 and 2004 of SFr600 million and SFr400 million respectively. However, in 2005, he said, the government envisaged that state finances would be out of the red.

The Swiss Parliament is set to debate state finances, including the recently approved budget, during its winter session.

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