Swiss public finances recorded a CHF750 million ($745 million) surplus last year thanks to a spate of early tax payments from companies escaping negative interest rates. But the government warned that public coffers would have ended 2016 in negative territory without these payments.
Negative interest rates encouraged tax payers, particularly in the corporate world, to use up some of their spare cash to settle bills early last year. By doing so, they avoided being charged for parking their cash in bank accounts, and received an early bird bonus from the tax authorities.
However, the government confirmed on Thursday that it had stopped early tax payment bonuses. In October the finance ministry had predicted a surplus of CHF2.2 billion as tax receipts rolled in early.
The eventual influx of tax payments swelled income to just over CHF67 billion – some CHF300 million or 0.4% more than expected. Government expenditure of CHF66.26 billion was CHF1 billion or 1.4% less than budgeted.
This is not the first time in recent years that the federal budget has exceeded expectations.
In 2015, the surplus of CHF2.34 billion comfortably exceeded the expected surplus of CHF400 million. In 2013, a deficit of CHF400 million turned into a surplus of CHF1.3 billion. Only 2014 recorded a small deficit – the first since 2005.
In fact, in 2015 it was reported that over the past decade, the cumulative surpluses had amounted to CHF27 billion, while CHF200 million in losses had been budgeted for the overall period.
But the cabinet warned on Thursday that the 2016 surplus could not mask several structural weaknesses in the Swiss economy, which are expected to put huge pressure on pensions and healthcare budgets.
In order to meet its obligations to keep a lid on public debt, the government has already laid down a significant public savings plan lasting until 2020.