Swiss Parliament Approves Income Tax Cut Package

by Ulrika Lomas, Tax-News.com, Brussels

19 June 2003

The Swiss cantons will this week decide whether to call a national vote on substantial income tax cuts approved recently by parliament, which many representatives have dismissed as an attempt to buy the public's vote in an election year.

The tax cut package will cost the government over CHF2 billion ($1.54 billion) according to some reports, and will be aimed mainly at higher income taxpayers and middle class Swiss families.

Under the proposals, a family with a total household income of CHF100,000 would see their tax bills slashed from CHF901 to CHF371, whilst single income households of two children and income of CHF60,000 would be exempt from federal tax altogether. Meanwhile, families with an income of CHF200,000 will see their taxes come down by CHF3,614.

Other measures include a substantial tax reduction for homeowners worth CHF460 million, and a lowering of stamp duty costing CHF310 million.

According to Swissinfo, the parliamentary approval of the plan has caused rumblings of discontent amongst representatives of the cantons, which make up the Senate, some of whom have dismissed the tax cut package as "gifts in election year". Members of the Social Democrat opposition meanwhile said the timing of the tax package resembled an act of the government of a "banana republic".

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