VAT increase for the army: the Federal Council revises downwards (cross-border guide)

Di Valerie Linc · Published on

The Federal Council has decided to temporarily increase VAT to finance defence strengthening, mitigating the impact on low-income domestic economies.

Contesto

In short - The Federal Council has decided to increase VAT to finance the army. - The increase will be temporary and limited to 0.5 percentage points. - The income will be allocated in full to the expenses for armament. ## Key facts - What: Temporary VAT increase to fund the military. - When: Limited increase to 12 years. - Where: All over Switzerland. - Who: Federal Council. - Amount: 0.5 percentage points. The Federal Council has decided to revise downwards the planned increase in value added tax (VAT) intended to finance the strengthening of the defence. Taking into account the criticisms that emerged during the consultation, the Government now proposes to temporarily increase the normal rate by 0.5 percentage points instead of the 0.8 initially planned. In addition, it renounces raising the reduced rate applied to food and medicines, Martin Pfister, head of the Federal Department of Defence, Population Protection and Sport (DDPS), explained at a press conference in Bern. This will mitigate the impact on low-income household economies. The additional revenue generated by the increase in VAT – said the Federal Councillor – will be allocated in full to the expenses for the armament of the army and their duration will be limited to 12 instead of 10 years as expected so far. ## Impact on households Increasing VAT will have a direct impact on

Dettagli operativi

Purchase of new defence systems DDPS has been commissioned to start negotiations for the purchase of a second long-range surface-to-air defence system with French, Israeli and South Korean manufacturers. This new system will be critical to strengthening security of supply and reducing dependence on a single supplier. ## Resumption of payments to the Patriot system Payments to the United States from the Patriot system, suspended in the fall, will now be resumed. A move dictated "by the security situation", Pfister reiterated, but also designed not to compromise the acquisition program of the F-35 fighters. Stopping the purchasing process without an alternative system is in fact not a viable option, said the head of DDPS, specifying that the purchase of a second system is necessary due to the delay of several years in US deliveries. ## Parliamentary Procedure The message is expected to be submitted to the Federal Council on 12 August, allowing Parliament to quickly start examining the draft. This will speed up the process of strengthening national defence, ensuring that Switzerland is ready to face any future threats. ## Conclusion The temporary increase in VAT is a necessary solution to finance the strengthening of national defence. Despite the impact on families, the government has sought to mitigate the impact on ## Recommended tools For an updated estimate, use the net salary calculator and the CHF-EUR exchange comparator.

Punti chiave

What to do for frontier workers For frontier workers, it is important to understand how the increase in VAT will affect their household budget. It's a good idea to review your monthly expenses and try to save where possible. In addition, it is important to stay informed about government decisions and the new defense systems that will be implemented. ## Using the tax calculator To calculate the impact of the VAT increase on your salary, you can use our tax calculator. This tool will allow you to see how the new VAT rates will affect your net income and plan accordingly. ## Conclusion The temporary increase in VAT is a necessary solution to finance the strengthening of national defence. Despite the impact on households, the government has sought to mitigate the impact on low-income household economies by ensuring that basic necessities remain accessible. With the purchase of new defense systems and the resumption of payments to the Patriot system, Switzerland will be better prepared to face future threats. Calcola il tuo stipendio netto Source: swissinfo.ch

Punti chiave

[{"q":"What is the amount of the VAT increase?","a":"The VAT increase will be 0.5 percentage points."},{"q":"How long will the VAT increase last?","a":"The VAT increase will last 12 years."},{"q":"How will the VAT increase affect low-income households?","a":"The government has given up raising the reduced rate applied to food and medicine, mitigating the impact on low-income families."}]

Frequently Asked Questions
What is the amount of the VAT increase?
The VAT increase will be 0.5 percentage points.
How long will the VAT increase last?
The VAT increase will last 12 years.
How will the VAT increase affect low-income households?
The government has given up raising the reduced rate applied to food and medicine, mitigating the impact on low-income families.

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