Shock reform for border workers: they will pay more taxes (cross-border guide)

Context

In a nutshell

• The Ticino League has presented a shock proposal for border workers in Ticino. - The proposal is to transform the old frontier workers into new ones, in order to pay more taxes. - The proposal was presented as a measure to help the public finances of the Canton of Ticino.

The proposal in detail

The Ticinese League has presented a reform proposal that envisages transforming old frontier workers into new ones, in order to pay more taxes. This measure was presented as a solution to help the public finances of the Canton of Ticino, which are in a situation of severe deficit.

How the reform will work

The proposal foresees that the old frontier workers, who have already worked in the Canton of Ticino for a certain period of time, will be considered as new frontier workers. This means that they would be subject to the levy applied to new cross-border commuters, according to the scale of rates set out in the proposal. This measure will be applied to all border workers who have worked in the Canton of Ticino for at least 5 years.

What would change

Moving from old to new cross-border commuter status would not change the gross salary, only the share of tax withheld on that income. How much more each person would pay therefore depends on the income band they fall into, according to the rates set out in the proposal and listed further down.

The proposal sets no individual amounts, so there is no single figure that applies to everyone. The only meaningful comparison is between the withholding tax currently deducted from a given cross-border commuter and the rate that would apply under the new classification.

Operational details

Key facts

• The proposal was presented by the Ticinese League. - The proposal envisages transforming old frontier workers into new ones. - The proposal was presented as a measure to help the public finances of the Canton of Ticino. - The proposal is based on a law approved by the State Council of the Canton of Ticino on 15 February 2022. - The law provides that frontier workers who worked in the Canton of Ticino before 1 January 2020 can be considered as new frontier workers if they meet certain conditions.

The proposal of the Ticinese League envisages applying the law approved by the State Council of the Canton of Ticino on 15 February 2022 also to border workers who worked in the Canton of Ticino before 1 January 2020. This means that frontier workers who have worked in municipalities such as Bellinzona, Lugano and Locarno could be considered as new frontier workers if they meet certain conditions.

The proposal provides that border workers who are considered as new could be obliged to pay taxes on non-residential work income, as provided for by the law approved by the State Council of the Canton of Ticino on 15 February 2022.

The amount due would depend on each worker's income and on the rate applicable to their band, not on a flat amount that is the same for everyone.

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Key points

The proposal in detail

The Ticino League has presented a shock proposal for border workers in Ticino. The proposal envisages turning old frontier workers into new ones, in order to pay more taxes. The proposal was presented as a measure to help the public finances of the Canton of Ticino.

The proposal envisages increasing taxes for border workers residing in municipalities such as Lugano, Bellinzona and Locarno. According to the Ticinese League, the new taxation system could generate additional revenue of around CHF 10 million per year.

The proposal envisages applying the following tax rates:

• 2% for frontier workers earning up to CHF 30,000 per year
• 3% for frontier workers earning between CHF 30,001 and CHF 60,000 per year
• 4% for frontier workers earning more than CHF 60,000 per year

The proposal was criticized by some members of the Christian Democratic Party, who said that the new tax system could be discriminatory against border workers.

"The proposal of the Ticinese League is a low blow for border workers," said the leader of the Christian Democratic Party, Giovanni Rüedi.

The proposal was presented on the occasion of the State Council of the Canton of Ticino, which was held on 20 July 2023. The proposal must be voted on by 15 September 2023.

The Ticino League has stated that the proposal is necessary to help the public finances of the Canton of Ticino,

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Source: comozero.it