High earners to be given an effective tax cut in Switzerland
The State Secretariat for Economic Affairs (SECO) has confirmed that the richest people in Switzerland are to receive an effective tax cut from 2023. The change will see the “solidarity surcharge” abolished - a tax implemented to bail out Swiss social security 11 years ago.
Swiss tax surcharge abolished for high earners
SECO confirmed the change last Thursday after the proposals were leaked to the Swiss media earlier in the week. The new system abolishes the surcharge which was paid by the 10 percent of Swiss citizens and residents with the highest salaries.
The scheme was first implemented in 2011, designed to bail out the government’s system of unemployment insurance, which was heavily indebted at the time. The extra tax was paid for by workers and companies, with each paying 1,1 percent of gross wages towards the surcharge.
Social services now solvent in Switzerland
So far, 340 million Swiss francs have been raised for social security through the surcharge system. Now, the government has confirmed that the extra tax will be phased out by 2023.
They explained that the social security fund had accumulated total equity of 2,5 billion Swiss francs since the scheme started, which has made its purpose obsolete. Even as sanctions against Russia bite the global economy, the government said it remained confident that the extra charge would no longer be needed.