A sigh of relief: the Swiss government was breathing a sigh of (tax) relief in February when voters came out narrowly in favour of proposals to reduce taxes for small- and mid-sized companies. But a bizarre sounding initiative to prevent fighter jets training over tourist resorts was booted sky high.

AuteurLedsom, Mark


Discussions over national tax policies rarely get hearts beating any faster, but Switzerland's newspapers were left breathless in February as they detailed the referendum "thriller" that saw just 50.5 per cent backing the finance ministry's latest tax plans.

Even the normally restrained Neue Zurcher Zeitung could not resist playing up the tension, describing the vote as one of the closest in years (with just 19,673 votes separating the two camps) and pointing out that the final outcome was only revealed once the last count had been completed in Canton Bern.

Those backing the reforms had admitted that the new tax laws were extremely complex. Already approved by parliament last year, the proposals are intended to reduce both the tax and the administration costs faced by small- and mid-sized companies, particularly during difficult times like starting-up, selling or being passed on through inheritance.

With more than 99 per cent of Swiss companies employing less than 250 people--and those same companies accounting for around two thirds of the total workforce--those parts of the reform were never expected to face much opposition.

More controversial plans to reduce the tax paid on company dividends--but only for shareholders in possession of at least ten per cent of the company in question--attracted much more criticism and helped explain why the vote ended up going so close to the wire.

"We had our noses bloodied," the visibly relieved finance minister Hans-Rudolf Merz told reporters immediately after the vote, pointing out that votes on tax are always hard to win, especially if they are complex and do not bring clear benefits to everyone.


While admitting that major shareholders would benefit the most, the pro-reform camp (including the Swiss Business Federation economiesuisse and three of the country's four main political parties) argued that a yes-vote would make Switzerland more attractive to investors, fostering growth and boosting employment figures by around 0.5 per cent.

The 'no' camp, led by the centre-left Social Democratic Party and the Trade Union Federation countered that the relief on dividend tax constituted an "unfair" tax break for the well-off and suggested that the new laws could even cause further shortfalls in the Swiss state pension scheme as companies sought to pay employees at least partly through share dividends rather than traditional salary payments (which include pension...

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