Swiss billionaire calls for expat hiring tax to fund low-income households

Swiss billionaire Alfred (Fredy) Gantner, co-founder of global private equity firm Partners Group, believes the government proposal to tax companies hiring foreign workers, as part of the EU Bilateral Treaties, doesn't go far enough. Gantner has put forward his own idea to tax businesses in Switzerland hiring expats and redistribute the money to low-income households.

Swiss households would benefit from expat tax

A vocal advocate against closer ties to the EU, Gantner has proposed a new idea which he hopes will spark political debate within Switzerland. Under his suggestion, companies in Switzerland hiring international workers should pay a tax tied to an employee's salary.

For example, to hire an international worker with a salary of 50.000 francs, the levy would be 500 francs a year. For an income of 81.000 Swiss francs per year, a company would pay around 4.000 francs a year for five years, totalling 20.000 francs, reports 20 Minuten.

As salaries increase, companies would pay more. For an income of 300.000 francs a year, the tax would be 45.000 francs a year and would hit 225.000 francs over five years, explains Blick. In total, the proposal has the potential to generate around 1,35 billion francs a year, according to Gantner.

The Swiss businessman thinks the tax would be enough to encourage companies to hire people based in Switzerland rather than choosing candidates from abroad. Furthermore, Gantner claims businesses benefit most from immigration, while local residents face high rents and overwhelmed infrastructure, so they should contribute to the costs immigration creates.

The tax revenue generated from the scheme would then be distributed to low-income households across Switzerland, with a four-person household potentially receiving up to 4.000 francs per year.

A direct challenge to the government’s Bilateral III plans

Gantner’s polarising idea comes shortly after the federal government edged closer to introducing a similar plan as part of the Bilateral III treaties with the European Union.

Earlier this month, the Council of States approved a proposal that will allow the Federal Council to introduce a tax on companies hiring international workers but only when immigration numbers start to cause “serious economic or social problems.”

The plan put to the government by FDP National Councillor Andrea Caroni supports the EU's free movement of persons agreement. "We don't want to break with the EU [...] In my view, the bilateral agreements, of which the free movement of persons agreement is an important component, are of great value to Switzerland," explained Caroni. Gantner's plan, on the other hand, would go against the agreements completely.

The Federal Council has been vocal about the benefits immigration brings to Switzerland, from plugging worker shortages in key sectors to boosting prosperity across the whole country, and previously recommended voters reject the SVP’s “No 10 million Switzerland” initiative.

Even the tax proposal as part of the EU negotiations still has a way to go before it is solidified in the new treaties, yet Gantner believes it "comes far too late" and doesn’t do enough to protect Swiss workers.