FDP Council of States member Caroni calls for a uniform VAT rate.

Swiss VAT law, with its three tax rates and numerous exceptions, is extremely complex and repeatedly causes headaches for many entrepreneurs. FDP Council of States member Andrea Caroni has therefore now launched a parliamentary initiative in which he calls for a radical simplification of VAT law to relieve the economy during the Corona crisis.

Council of States member Andrea Caroni calls for a uniform VAT rate

VAT is a central source of revenue for the federal government. No wonder, as practically all companies with an annual turnover of more than 100,000 francs must pay the tax. Since its introduction, the VAT system has not only gained in importance but also in complexity. With its three tax rates and numerous exceptions, VAT regularly causes headaches for many entrepreneurs. For this reason, FDP Council of States member Andrea Caroni is now calling for a simplification of VAT law. In his motion dated March 19, 2021, Caroni instructs the Federal Council to develop the necessary legal foundations for the introduction of a uniform tax rate with as few exceptions as possible. According to the Council of States member from Ausserrhoden, a radical simplification of the VAT system is the best means to relieve the Swiss economy during the Corona crisis.

Uniform tax rate of around 7 percent possible according to the Federal Council

Caroni already asked the Federal Council in an interpellation of September 23, 2019, to give a statement on what a simplification of the VAT system could look like. According to the response from the Federal Council, a simple VAT law with few exceptions is possible. A revenue-neutral unification of the three current tax rates would result in a uniform tax rate of about 7 percent. Only the banking and insurance business, as well as revenues from betting, lotteries, and gambling, would necessarily remain exempt from tax. All other exceptions, for example, for healthcare and social services, sports, or education, could be eliminated. Such a streamlining of the VAT system would result in savings of around 500 million francs, which could be used to support poorer households.

Gastro industry objects

FDP Council of States member Andrea Caroni is not the first parliamentarian to aim for a simplification of VAT law. Former Federal Councilor Hans-Rudolf Merz already launched a corresponding initiative twelve years ago, but without success. Particularly in the gastro and hotel industry, the introduction of a uniform tax rate meets with great resistance. Since the industries currently benefit from a special rate of 3.7 percent, a uniform tax rate of 7 percent would mean a massive tax increase for them. Such an additional burden would hardly be bearable for the hospitality industry, especially in view of the losses due to Corona.

Source: NZZ: «Conservative politicians want to push through a radical overhaul of VAT – but opponents are already positioning themselves» from March 26, 2021.

Findea helps you to keep track of your company's financial situation at all times.