Swiss Government Rejects Proposal To Replace VAT
The Swiss Government announced on January 7, 2014, that it had again rejected a popular initiative, “energy instead of VAT,” that would have replaced the nation’s value-added tax (VAT) with an emissions-based levy.
The initiative was last rejected in November 2013. As with its earlier decision, the Government pointed out that the VAT is the main source of revenue for Switzerland. The proposal to replace the tax on a revenue-neutral basis, therefore, would require very high tax rates on producers of non-renewable energy, including oil, natural gas, coal, and uranium, with the burden shouldered by companies.
The Government pointed out that, as a zero rate of VAT is levied on exports, the new tax would significantly increase the tax burden on exports and significantly damage the international competitiveness of cross-border traders.
Switzerland levies three rates of VAT: a headline rate of 8 percent, a reduced rate of 3.8 percent for hoteliers, and a second reduced rate of 2.5 percent.
Source: Tax News – Swiss Gov’t Rejects Proposal To Replace VAT
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