Swiss approve higher VAT tax

29th September 2009, Comments 0 comments

Switzerland votes for a seven-year increase in value-added tax to cover disability insurance.

Geneva -- Swiss voters in a majority of cantons approved on Sunday a seven-year increase in value-added tax to help cover a deficit in the nation's federal disability insurance system.

By a vote of 54.5 percent, with 12 cantons in favour and 11 against, they approved the tax increase to 8.0 percent -- it is currently 7.6 percent -- from January 2011 until the end of 2017, officials said.

A reduced tax on essentials will meanwhile increase to 2.5 percent while a special hotel tax will rise to 3.8 percent -- altogether generating CHF 1.1 billion (EUR 730 million, USD 1.1 billion) a year.

The federal disability insurance regime is CHF 13 billion in debt, and so far the government has used money from the old-age pension scheme to cover the loss.

French- and Italian-speaking cantons supported the tax increases in Sunday's referendum, while German-speaking regions were opposed.

AFP / Expatica

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