Swiss Parliament Debates Tax Cuts

by Ulrika Lomas, Tax-News.com, Brussels

27 September 2001

The Swiss Parliament is in the middle of a two-day debate over tax cuts that will give breaks to families with children, reduce stamp duty and lessen the tax burden for businesses but will cost the federal government up to SFr 2.2 billion (US$1.4 billion) a year. The package was put forward by a parliamentary committee, supported by three of the four main political parties, and goes beyond a government proposal for tax breaks worth SFr1.7 billion annually.

Finance minister Kaspar Villiger has repeatedly warned that the federal accounts risk falling back into deficit within the next few years. The federal debt stands at nearly SFr110 billion following years of deficits during the 1990s, but the budget is currently balanced. The fourth party, the Social Democratic Party, is opposed to the tax cut plans because it says they are unfair and are targeted mostly towards wealthy people.

While Parliament debates tax cuts, a referendum has been forced on the Government by the Trade Union Federation on the introduction of a capital gains tax. This will take place in December, and there are no prizes for guessing what the result will be.

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