What is the vote about?
On May 19, 2019, Switzerland will be voting on the social security and corporate tax reform. The voting proposal consists of two parts. On the one hand, it provides a fair and internationally accepted framework on corporate taxation. On the other hand, it will support the Swiss Old Age pension fund / insurance (AHV) with CHF 2 billion a year. The AHV is being financed by the Swiss Federation, as well as by employers and employees.
The social security and corporate tax reform creates two major advantages for our country. It abolishes the existing (and internationally criticized) tax privileges and it makes a valuable contribution towards the security of the AHV. It will be a targeted investment into Switzerland’s stability and prosperity. It will be an advantage for both the AHV as well as for the business- and R&D location Switzerland.
Why is this voting proposal crucial?
This voting proposal allows us to finally take a step forward in both the financing of the Old Age insurance as well as in corporate taxation matters. A solution for each of the issues are overdue – but the necessary steps have been politically blocked in both cases for a long time. The social security and corporate tax reform is a well-balanced package providing valuable benefits for the general public, the companies, the state, the cantons and the communes. In other words: an advantage for both the Old Age insurance as well as for the economy.
An advantage for the business-and R&D location Switzerland
For a long time, Switzerland has been a very successful player in the international tax competition for international corporations, who have been providing hundreds of thousands of jobs and apprentice positions and a myriad of orders for all sorts of suppliers. However, the global tax competition is getting tougher and tougher. To avoid discrimination of Swiss companies abroad, tax privileges for approx. 24’000 companies shall be abolished. The social security and corporate tax reform provides an internationally accepted regime with a level playing field for all. This will enable Switzerland to remain a globally leading business location and secures us multi-million tax revenues.
Support package for Cantons and Communes
The social security and corporate tax reform contains vital supporting measures for Cantons and Communes to ensure an orderly and considerate adaptation of the tax regime. Thanks to a wisely composed fiscal policy toolkit, this reform provides tailor-made solutions for each and every Canton and establishes guidelines for the tax competition among the Cantons. To ensure that all the Cantons create an attractive tax environment and compensate the expected consequences for Communes, the state will place a lump sum of approx. CHF 1 billion per year at the disposal of Cantons and Communes.
An advantage for the Old Age Insurance (AHV)
Our most important social security institution, the AHV, is suffering from an acute financing shortage, because our society is not only growing older and older, but also because the Baby-Boomer generation will be retiring within the next few years. Already now, the AHV pays out over one billion CHF more in pensions and allowances than it earns. Thanks to the expected supplementary funding of two billion Swiss Francs per year, the social security and corporate tax reform will alleviate the current funding shortfall. The social security and corporate tax reform will not lead to an expansion of social welfare but will make an indispensable contribution to secure the pension funds, which will benefit us all.