The authorities in the small canton Schwyz community of Freienbach have decided to slash local taxes by 40 per cent, after finding they were collecting more money than they could manage.

The cantonal and local authorities set the level of taxes in Switzerland. Individual communities can set their taxes lower than the cantonal level if they wish, and Freienbach's tax rate was set at 85 per cent of the canton Schwyz base.

But that still meant the community managed to accumulate a capital of SFr66 million, plus SFr43 million in reserves. Tax revenues rose by 100 per cent in 1999, leaving Freienbach with a surplus of just over SFr13 million, rather than the expected SFr5 million.

Willy Jud, responsible for the community's finances, said that the rate would be cut to 45 per cent of the cantonal level. He told the German-language newspaper "Blick" that Freienbach, which sits on Lake Zurich, already had three swimming pools, state-of-the-art sports facilities, and modern schools.

"We're cutting taxes since it's not our job to invest the surplus for people," he said. The cut will take place over two years.

Much of Freienbach's good fortune lies in the fact that it hosts the headquarters of the BZ bank, founded by billionaire Martin Ebner.

swissinfo with agencies

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