Tax debt study finds 16% of Swiss struggle to pay up

KEYSTONE

One in six Swiss persons struggled to pay taxes in recent years, according to a survey published by Comparis. Some resort to loans or extensions, with the risk of falling into debt problems.

The majority of the population is able to pay their tax bills, but there is also a not insignificant portion who struggle or fail to do so altogether. According to the study, 77% of respondents were able to pay their taxes with their own money between 2017 and 2021, but as many as 16 percent struggled. Among them were those who had to ask for help, a loan or an extension, and 3%, by not paying, ended up receiving enforceable injunctions.

Pascal Pfister, director of the Swiss Debt Counseling Center is not surprised by these figures. “Taxes,” he reports, “are the number one cause for indebtedness. The vast majority of people who come to us are in debt to the [Swiss tax authorities]. People at risk of debt have, basically, too little money available. If an unforeseen event happens in their life, a divorce, loss of employment, an accident, and then if the money runs out, the last thing you pay is taxes.”

The study also reveals regional differences. In German-speaking Switzerland, the percentage of people who have not yet paid their taxes from three years ago (those of 2021) stands at 3%, while in French-speaking Switzerland the share is 7% and in Italian-speaking Switzerland it is 8%. More extensions are also requested in the French and Italian-speaking parts of the country. Pfister reminds that, in general, the problem of indebtedness can touch all age groups and, depending on this, the risks also vary. Divorce is typically a set back for the middle aged, whereas for young people the difficulty may arise when they leave the parental home and have to manage their household budget for the first time.

Is there any advice for avoiding the spiral of debt?

“It is very important — concludes the director of the Counseling Center — to know your budget. In almost every canton there are counseling services that help you understand how much money is coming in and what your expenses are. It is important then to ask for help early on, including whether, for example, you qualify for a reduction in health insurance premiums.”

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