Swiss Citizens Were Busy at the Polls Last Weekend
On Sunday, June 18, Swiss citizens voted on three referendums—on new laws and regulations related to corporation tax, climate change, and COVID-19.
OECD/G20 Taxation of Large Corporate Groups
The first issue on the ballot was an OECD/G20-led global effort to clamp down on tax avoidance by large corporations by implementing a minimum tax rate of 15% on multinational firms with annual profits over $750 million. The implementation is to take the form of a supplementary tax. If Switzerland does not levy a supplementary tax, other countries can collect the difference to the 15%. While difficult to estimate the financial impact, the minimum tax of 15% is estimated to yield CHF 1.0- 2.5 billion in the first year, with 25% of the revenue from the supplementary tax going to the federal government and 75% to the cantons, where a financial equalization will allow all cantons to benefit equally. Many international companies are active in Switzerland, providing numerous jobs and contributing significantly to tax revenues. As higher taxes may reduce the attractiveness of Switzerland as a business location, some of the revenue from the supplementary tax would be used to promote Switzerland in order to secure jobs and tax revenue. The implementation of a minimal taxation of 15% requires an amendment to the Federal Constitution, which is why a referendum was needed. A resounding 78.5% of Swiss voters accepted this new special taxation (81.3% of voters in canton Basel-Stadt).
Federal Law on Climate Protection Goals
Switzerland imports around three quarters of its energy. Crude oil and natural gas consumed in Switzerland come entirely from abroad. These fossil fuels are not infinitely available and heavily burden the climate. In order to reduce the environmental impact and dependency on foreign countries, the Federal Council and Parliament want to reduce the consumption of oil and gas. At the same time, more energy is to be produced in Switzerland.
The bill was an indirect counter-proposal to the “Glacier Initiative” that was considered too radical by the federal government. With the proposal, Switzerland is gradually reducing its consumption of oil and natural gas. The aim is for Switzerland to become climate-neutral by 2050. The bill includes measures to reduce energy consumption and to subsidize those who replace their oil, gas, or electric heating. In addition, companies that invest in climate-friendly technologies will also be supported. Unlike the previous “Glacier Initiative,” the new law does not contain a ban on fossil fuels such as petrol, diesel, heating oil, and gas. A referendum on this new proposal was passed with 59.1% of the Swiss voters in favor of the new proposal on climate protection (73.3% in canton Basel-Stadt).
The coronavirus remains unpredictable. Its further development and whether dangerous virus variants will emerge again cannot be predicted or ruled out. Parliament therefore wanted to extend the legal basis for certain measures in the COVID-19 Act until mid-2024. This would allow the authorities to act quickly in an emergency, to protect particularly vulnerable people and the healthcare system, as well as facilitate the importation and use of medicines against severe COVID diseases, even if they are not yet approved in Switzerland. In addition, the ordinance would allow the federal government to once again issue COVID certificates, especially if this would become necessary for trips abroad. It could also mandate employers to protect people who are particularly at risk and, for example, allow them to work from home. In the event of any border closures, the federal government must ensure that cross-border commuters can continue to enter the country. The currently deactivated SwissCovid app could also be reactivated if necessary. The referendum was asking for an extension to these provisions, which was approved by 61.9% of Swiss voters (72% in canton Basel-Stadt).Share