In its latest Economic Survey of Switzerland, the OECD called for a rebalancing of the country’s tax mix, recommending shifting that mix towards more growth-friendly sources in order to help prepare the system for the impact of an anticipated wave of aging Swiss citizens.

The OECD observed that Switzerland “relies more on direct taxation and social security contributions than most other OECD countries, at two-thirds of revenues.”

It went on to suggest that government plans, to raise the VAT rate by 0.7 percentage points and reduce disincentives to work for second-earners in families, are steps in the right direction.

The OECD recommended that VAT exemptions and reduced rates should be “wound back” to finance lower personal income taxes, particularly on lower income earners. It added that the cantons could make more use of the recurrent taxation of immovable property and that there is scope to raise more revenue from environmental taxes.

For more information on this, and other topical international tax matters, please visit: https://www.cchgroup.com/roles/corporations/international-solutions/research/global-tax-weekly-a-closer-look

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