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Tax breaks and banker salaries tabled in Senate

A special two-day session of the Senate is underway to discuss plans for fiscal reforms and proposals to cap salaries of top bankers.

On the table are proposals by the government to reduce tax rates for families and to tie tax thresholds to inflation and the pace of earnings growth.

The tax breaks would result in a loss in revenue of SFr500 million ($463 million) for the federal authorities and SFr100 million for cantons.

However the cantons, which have a wide-ranging autonomy on fiscal matters, have come out against the implementation of the tax breaks, to be implemented as early as next year.

On Tuesday, the Senate will debate moves to cap salaries and bonuses of top bank managers and board members. Senators will also discuss proposals to split up banks’ business activities at home and abroad, a move proponents say would reduce economic risks.

Switzerland’s second largest bank, UBS, posted record losses in 2008 as a result of the global financial crisis.

The government granted a multi-billion bail-out package for the bank, which is also involved in a legal dispute in the United States over tax issues.

In March, the House of Representatives- the other parliamentary chamber- agreed to demand a restructuring of the country’s major banks, including a possible split of the investment divisions.

Observers say the Senate is unlikely to follow suit.

Urs Geiser,

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SWI - a branch of Swiss Broadcasting Corporation SRG SSR

SWI - a branch of Swiss Broadcasting Corporation SRG SSR