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Photo finish decides vote on company tax cuts

The outcome of vote on fiscal reforms was one of the closest in recent history Keystone

Finance Minister Hans-Rudolf Merz has expressed satisfaction at voters' approval of planned tax breaks for companies in Sunday's nationwide poll.

This content was published on February 24, 2008 - 19:12

The reform, which was endorsed by parliament last year, scraped just over 50 per cent of the vote. It had been contested by centre-left parties and trade unions.

Merz said he was relieved that small and medium-sized enterprises (SMEs) would now benefit from the package of measures aimed at reducing the financial and administrative burden.

These measures include a controversial reduction in tax rates on dividends for shareholders with at least a ten per cent stake in a company.

He said his ministry would examine further steps to reduce corporate taxes.

Merz added that Sunday's result was extremely close. "Supporters of the reform got off with a slap on the wrist."

Bruno Frick of the centre-right Christian Democrats said approval of the fiscal reform was a commitment to lower taxes and to compete with the European Union policy on taxation.

Several prominent experts had come out against the reform, saying it was unconstitutional and denying that it would give a boost to the economy.

The centre-left Social Democrats, which had challenged the tax breaks to a nationwide vote, said the extremely close result was a clear signal from voters that they do not want any more unfair tax reductions for the well-off.

The Social Democrats said families with children should benefit from any further fiscal reforms.

For his part, Daniel Lampart of the Trade Union Federation said the close result was a call by voters for a fair tax system.

Opponents of the reform have lodged appeals against similar overhauls of the tax system on a cantonal level.

Air force

In another vote on Sunday, the Swiss overwhelmingly rejected a ban on training flights by the Swiss Air Force over tourist areas.

The people's initiative, launched by an environmental group, was aimed at silencing the noise of fighter jets in these areas.

Nearly seven out of ten voters and all 26 cantons rejected the proposal.

Franz Weber, the driving force behind the initiative, criticised the defence ministry campaign ahead of the vote, but vowed to continue the fight against noise pollution in alpine regions.

"Our only aim was to protect the environment," he said.

The defence ministry for its part accused supporters of the initiative of trying to abolish the Air Force and undermine Switzerland's sovereignty.

Defence Minister Samuel Schmid said he was pleased with the outcome of the vote. He said only a well trained air force could defend Switzerland's sovereignty and neutrality.

"Only a sovereign Switzerland is attractive for the economy, tourism and the international community," he said.

Schmid pledged to seek ways to reduce noise pollution from military aircraft.

Turnout in Sunday's vote was 38 per cent, below the average in nationwide ballots.

swissinfo, Urs Geiser

In brief

Corporate tax for holding companies came into force ten years ago.

In 2004 voters turned down a proposed tax package of tax cuts for families, property owners and shareholders.

In a separate issue, Switzerland and the European Union are at loggerheads over preferential tax rates for holding companies from the EU.

Under Switzerland's three-tier tax system, the federal, cantonal and local authorities levy taxes on individuals and businesses. The highest proportion goes to the cantonal authorities.

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Voting

Sunday's ballot was the first nationwide vote in Switzerland in 2008.

About 4.9 million citizens aged 18 or over were eligible to vote. Turnout was 38.2%.

Vote on corporate tax breaks: 50.5% yes, 49.5% no.

Vote on ban on fighter jets: 68.1% yes 31.9% no.

Polls also took place in several cantons and communes on a variety of issues.

Votes are usually scheduled on four Sundays during the year.

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