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The people will decide on a new tax gift, the abolition of the withholding tax for companies. It might well experience the same fate as the abolition of stamp duty, refused by 62.7% of the vote.
Withholding tax collected at source is an instrument that obliges investors to declare their income.
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Tuesday, even before the left announced the filing of its referendum, a press release reached all the editors to announce a “broad alliance in favor of yes to the reform of withholding tax”. There are the PLR, the Centre, the Liberal Greens, the UDC, ÉconomieSuisse, the Swiss Employers’ Union, scienceindustries, the Swiss Bankers Association, the Swiss Insurance Association, Swiss Holding and Swissmem. All the apexes of the economy are at attention to avoid reliving the defeat of the stamp duty on February 13th.
The stamp duty, it will be recalled, was intended to tax up to 1% capital investments above one million francs. The Swiss people refused to 62.7% to make this “tax gift” requested by the economy to increase the attractiveness of the Swiss financial center. The tax loss was estimated at 250 million francs per year. With the abolition of withholding tax, the right once more wants to favor an economic clientele with similar arguments.
A tax security instrument
Bond interest in Switzerland is subject to withholding tax at source of 35%, which is then partially refunded when the tax declarations are made. It is a tax security instrument, so that the interest received is properly declared. If this tax is abolished, the tax authorities deprive themselves of a tool to counter tax evasion. He risks losing significant revenue, estimated at several hundred million francs in the case of withholding tax.
The law voted by the right of Parliament wants to exempt Swiss companies and companies, as well as foreign investors from the payment of withholding tax. However, the money placed in the savings accounts of Mr. and Mrs. everyone will continue to be subject to it. In other words, we do not trust small savers so much, but more large investors. In front of the people, this unequal treatment will be one of the weak points of the project.
The interest of citizens
For now, the right sidesteps questions of fiscal morality or unequal treatment. It sticks to highlighting the benefits for the Swiss financial center of a return to commercial transactions, which take place abroad because of a dissuasive withholding tax. “Instead of being used to pay interest, writes the alliance for the yes, taxpayers’ money can be invested in the interests of citizens”.
Like stamp duty, citizens will think carefully regarding where their real interest lies. As they have shown on several occasions, they do not like lowering taxes for the most affluent.
