Canton Zurich to cut taxes despite budget deficit
The residents of Canton Zurich will have to pay less tax over the next two years, after a decision by the cantonal authorities to reduce the general tax rate by 1 percent. The move takes 70 million Swiss francs' worth of revenue away from the canton and adds on to the annual deficit of 296,6 million Swiss francs that Canton Zurich already has.
Zurich tax cut to last until 2023
The tax cut is the first in Zurich since 2003 and will apply to all tax-paying residents in 2022 and 2023. The advocates of the tax cut claimed they wanted to “give something back to the population during the pandemic.”
Although the cut will only amount to 15 Swiss francs per year in residents' tax returns, it will still add 70 million Swiss francs to the deficit in what Watson called a “lawnmower cut.” The plan was criticised by both sides of the political spectrum, with some fearing it will lead to austerity measures in the future.
Opposition says it is the wrong time to cut taxes
“In a crisis, you shouldn’t lower taxes,” noted the Head of the Department of Finance for Canton Zurich, Ernst Stocker. He said the government will now have to achieve its goals with a much tighter budget. Cantonal Councillor Markus Bischoff called the tax cut “ridiculous” and an "election campaign gift for the bourgeois clientele.”
In the end, as part of the budget bill, the cut passed the Cantonal Council of Zurich by 109 votes to 59. This vote means the budget of the most populous canton in Switzerland is now around 17,1 billion Swiss francs a year.