People vote on VAT increase to cover AVS 13th-pension costs

Context

TL;DR

• The people approved the 13th AVS pension
• On November 29, there will be a vote on the VAT increase
• The Federal Parliament chose VAT to cover the costs
• The reduced rate for essential goods remains unchanged

Key facts

• Signatory → Sara Demir, cantonal parliamentarian for il Centro
• Benefit → thirteenth AVS pension
• Date → November 29
• Parliamentary decision → increase in VAT
• Coming years → further decisions and AVS 2030 reform

On November 29, voters will be called upon to vote on the increase in VAT chosen by the Federal Parliament to help cover the costs of the thirteenth AVS pension. Sara Demir, cantonal parliamentarian for il Centro, considers this step a difficult but necessary choice following approval of the new benefit.

The decision to be funded

The sequence outlined in her remarks is clear: first, voters approved the thirteenth AVS pension; then the issue of funding arose. Old-age provision is described as one of the foundations of Swiss solidarity; the next question concerns how to sustain the benefits introduced over time.

Demir does not present the increase in VAT as an ideal solution. Her reasoning is based on the lack of cost-free solutions and the need to distribute the burden without further penalizing those who work and produce.

“There are no shortcuts: we need to decide how to distribute the costs without further penalizing those who work and produce.”

The first alternative she rejects is a further increase in payroll contributions. According to the cantonal parliamentarian, this path would further reduce people’s net wages and increase companies’ costs. She also points to the Canton of Ticino, where many companies operate in a challenging competitive environment.

The second caveat concerns the retirement age. Demir acknowledges that those who wish and are able to continue working should be supported, but she does not consider it right to base the sustainability of the AVS on the idea that everyone should extend their working lives. As she points out, working conditions are not the same: for those who perform physically demanding tasks, reaching the end of their working lives in good condition can be more difficult.

The November vote is therefore presented as a decision on funding a benefit that has already been approved, not as the definitive solution for the AVS.

Operational details

Comparing the alternatives

Demir's statement builds the comparison around the stated effects and limitations, not around a numerical calculation. The verifiable connection therefore concerns the basis on which the burden would fall and the limitation that the Grand Council member associates with each option.

What the source compares

In the case of VAT, the statement simultaneously asserts that the increase would entail a cost for individuals and families and that the burden would also be spread beyond labour and wages. This is the concrete connection supporting the stated preference: not a promise of zero cost, but the choice to avoid concentrating all funding on labour and companies. The fact that the reduced rate for essential goods and services remains unchanged also limits the effect described, without eliminating it.

The comparison with the retirement age follows an explicit criterion. The statement does not dispute that some people may continue working for a long time; it disputes the idea that this possibility could become an automatic response for everyone. The distinction concerns working conditions: those who perform physically demanding tasks may face greater difficulty reaching the end of their careers in good condition. Hence the preference for measures that support those who want to and are able to work longer, without turning this choice into a general obligation.

The proposal concerning tobacco and alcohol plays a different role. It is not presented as an already sufficient alternative, but as a possibility that the Federal Council should seriously assess through a review of taxation. The reference to the 13th pension's multibillion costs sets the limit of the proposal: according to Demir, those revenues cannot be considered sufficient on their own to cover them.

The phrase 'the lesser evil' therefore has a precise meaning in the statement: it does not mean that VAT is harmless, but that, among the alternatives considered, Demir prefers neither to place a further burden on labour nor to use the extension of working life as an automatic response.

Key points

The AVS dossier remains open

The passage of November 29th does not close the discussion. In Demir's argument, the possible increase in VAT would help finance the new benefit, but would not by itself solve all the financial challenges of the AVS. Further decisions would be needed in the coming years and the 2030 AVS reform should be approached seriously.

The limit of the proposed solution

The limit is not presented as a technical detail, but as a political condition. An important performance must be able to be sustained over time. For this reason, the responsibility of politics is measured on several fronts: the security of retired people, the possibility for those who work to contribute without being continually burdened by new costs and the confidence of younger generations in the future.

The intervention does not provide a VAT rate, a figure per household or a breakdown of costs between individuals, families, workers and companies. It therefore does not allow us to transform the preference for VAT into an individual calculation, nor to say what the concrete effect would be on the consumption of a single family. The documented data is more limited: the increase would have a cost for individuals and families, while the reduced rate for basic necessities and services would remain unchanged.

The same limit applies to income from tobacco and alcohol. Demir asks the Federal Council to seriously address the possibility of a revision of the taxation on these products, but does not present an estimate of the revenue. The text only allows us to report two points: the road deserves attention and, given the billion-dollar cost of the thirteenth income, it cannot be assumed that it is enough on its own.

The distinction between contribution and complete solution avoids attributing to the vote a result that the intervention does not promise. The federal parliament chose VAT to help cover the costs of the new service; the sustainability of the entire system remains linked to subsequent decisions. Even the invitation to discuss the AVS 2030 indicates that the financing of the thirteenth annuity is still an open chapter.

For the official reference indicated on the AVS, the [SYnoptic table AVS 2026] is available (https://www.ahv-iv.ch/p/2.01.i). To learn more about income, consult AVS and pension.

Source: tio.ch