Government aims to slash stamp duty

The government wants to abolish stamp duty for certain institutional investors Keystone

The government wants to scrap stamp duty on certain types of financial transactions, in a move it says is necessary to maintain the attractiveness of Switzerland as a financial centre.

It proposed on Monday that parliament vote on a series of urgent measures in December that would result in a loss of some SFr500 million ($290.7 million) to the federal coffers.

In particular, the government wants to abolish stamp duty on turnover for certain institutional investors – public administrations, investment funds, life insurers and pension funds.

The proposals closely follow the recommendations of a working group set up in March by the finance minister, Kaspar Villiger.

In August, the Swiss Bankers Association said the revision of the federal stamp duty legislation was SFr500 million “well invested”. The figure is about a quarter of the annual revenue generated by federal stamp duty.

The president of the Association, Georg Krayer, said there were advantages to reducing the tax burden on domestic and foreign pension funds, insurance providers, investment fund companies and the public sector.

“In this way, we can make institutional business – a rapidly growing global market – a second key pillar of the Swiss asset management industry alongside private banking,” he said.

Claims that doing away with stamp duty was a gift to the banks or the rich were unfounded, Krayer argued.

“If Swiss shares are to be sold in Switzerland, then Swiss market players must be able to operate from their registered offices in Switzerland on an even playing field with their foreign competitors,” he said.

swissinfo with agencies