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Lump sum tax survives attack in parliament

Another attempt to bring about an end to preferential taxes for wealthy foreigners in Switzerland has failed in parliament.

In line with a decision by the Senate, the House of Representatives on Thursday threw out a proposal by canton St Gallen to ban lump sum taxation.

The house also voted down a proposal by a parliamentarian from the centre-left Social Democratic Party to set limits for such tax breaks.

Supporters of a ban argued lump sum taxation was in breach of the constitution, while opponents warned against giving up a handy method which gives Switzerland a competitive edge and attracts welcome taxpayers.

They also said the government was preparing moves for a reform.

About 5,000 foreigners benefited in 2008, resulting in revenue of SFr578 million ($647 million).

A leftwing party, the Alternative Left, says it will launch an initiative next month to abolish lump taxation across the country.

Voters in canton Zurich decided to end such tax breaks in 2009. Ballots are also scheduled in other cantons.

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