Swiss finance minister urges voters to back higher corporate tax

SWISS Finance Minister Karin Keller-Sutter urged voters to back a plan to raise corporate taxes, warning that the country would lose revenue to other countries if it doesn’t pass a ballot due in less than two months.

The vote relates to a global agreement for a minimum corporate tax rate of 15 per cent, higher than in many Swiss cantons. The structure of the deal, due to come into force at the start of next year, means that if Switzerland doesn’t implement that levy, another jurisdiction can collect the difference.

“It’s important that Switzerland can implement minimum tax the same time as other countries,” Keller-Sutter said on Monday (Apr 24) in Bern. “Because otherwise other countries could collect tax revenue, which Switzerland could use to improve its own attractiveness.”

The 15 per cent OECD minimum tax was agreed on by almost 140 countries in 2021. Low-tax Switzerland is concerned about its competitive edge, but is resigned to accepting the deal because of the failsafe measure that ensures companies will still have to pay, even if in a different country.

Against that backdrop, the government, parliament and most political parties are pushing for a ‘yes’ in the national vote set to be held Jun 18. The only notable exception is the Social Democrats, the second-largest power in parliament, which supports the idea of a minimum tax, but doesn’t like the plan for distributing the additional revenue.

That plan will see 75 per cent of the extra money – estimated at 1-2.5 billion Swiss francs (S$1.5-S$3.8 billion) – going to the cantons, with the remainder to the federal government. The Social Democrats fear that cantons will use the funds to benefit multinationals in other ways. BLOOMBERG