Switzerland Today
Dear Swiss Abroad,
As the first month of 2025 comes to an end, controversies surrounding the Swiss army continue – this time concerning the C2Air project, a new system for monitoring military airspace.
Also in today’s briefing: will the Swiss federal government "tax the rich"? How has Brexit affected the Swiss Abroad in the UK? Plus, an intriguing study on insects.
Sunny regards from Bern!
Swiss Defence Minister Viola Amherd and military leaders joined forces today to defend themselves against parliamentary and media criticisms of problematic procurement projects.
The parliament’s financial commission has raised alarms in a letter sent to the outgoing Defence Minister Viola Amherd mid-January. According to the report, seven major armament and IT projects, estimated at CHF19 billion ($20.9 billion), present massive risks. The Swiss Federal Audit Office has, for its part, highlighted “unsatisfactory” management of the army’s procurement of Israeli drones.
Following an investigation, Swiss public television, SRF recently revealed that the army tried to conceal an explosive internal report on one of its major projects. The document warns of a collapse in the surveillance of military airspace and reveals a climate of fear within the military leadership.
In a press conference today, Amherd admitted that she had not provided enough information to the public. “The challenges are great and the state of affairs is unsatisfactory,” she told the media.
“We are doing everything we can to complete these projects, but there are obstacles due to their size or duration that we cannot influence,” she added,
There are six main reasons for the delays: overly high initial expectations, underestimated complexity, ‘Swissisation’ (adapting to Swiss-specific needs), organisational obstacles, delivery delays and price increases.
Army Chief Thomas Süssli pointed out that the defence ministry is working on 169 major projects to restore defence capabilities, most of which are on track and within budget. He criticised the media for failing to report positive developments and assured that “no taxpayers’ money has been wasted”.
- Read the full article by Swiss public television, SRFExternal link (in German) or RTSExternal link (in French)
A new proposal seeks to apply higher tax rates on capital withdrawals from the second and third pension pillars.
The Swiss federal government is not only aiming to cut costs but also to increase tax revenue, reports Swiss public television, SRF.
The second (occupational) pillar and third (voluntary private) pillar of the Swiss pension system are both subject to tax, calculated at a special rate independently of other income. If an individual withdraws capital from their pension fund, a capital withdrawal tax applies.
The proposal primarily targets high earners and individuals who have saved significant sums in their pension funds. For example, under current rules, an individual withdrawing CHF1 million ($1.10 million) from their pension fund pays CHF23,000 ($25,251.95) in federal tax. Under the new proposal, this would nearly double to CHF42,000.
However, married couples who have contributed less than CHF300,000 to the third pillar could see tax savings. A couple withdrawing CHF100,000 from their third pillar currently pays CHF2,414 in tax. Under the new system, they would pay around CHF1,200.
The aim of the reform is to generate an additional CHF160 million in federal revenue while reducing tax privileges. The proposal applies only to federal tax rates; cantonal rates remain unaffected. Parliament will now review the proposal.
- Read the full article on Swiss public television, SRFExternal link (in German)
- Are you a Swiss Abroad and need more information about pension funds? Here is an helpful article: Emigration and pension benefits: how to save on taxes (Available in English, French, German and Italian)
Swiss citizens in the UK have faced numerous challenges since Brexit – and they are preparing for more.
The Camden Watch Company, run by Jérôme Robert and his partner Anneke Short, sells timepieces, some imported from Switzerland. In 2016, when the UK voted for Brexit, Robert, a Neuchâtel native, was deeply concerned. Overnight, his customers faced customs taxes. For a CHF1,000 ($1,097.91) watch, this tax could be as high as CHF200 ($219.58).
For Marcello Basini, who sells fresh produce, the challenges are even greater. His shop stocks Swiss cheese and other products from the Emmental valley. In early 2024, the UK introduced new health certificate requirements for certain animal and plant products, along with physical customs checks. This has created a significant administrative burden.
Cheese shop La Fromagerie had to hire a full-time employee to manage the additional paperwork and even lost suppliers unwilling to deal with the bureaucracy. Worse, when supplies get stuck at the border, they risk spoiling.
“For 2025, we will have to hire a representative in Europe to ensure our products comply with EU standards,” says Robert.
- Read more testimonials from the Swiss Abroad in the UK in Le TempsExternal link (subscription required, in French)
More
A 20-year study by the Swiss Federal Institute for Forest, Snow and Landscape Research has found that insect diversity in forests increases significantly after a storm.
The study compared forests where fallen trees had been left untouched with those that had been cleared. The results were surprising: researchers found greater biodiversity in storm-damaged forests.
While the overall number of species was similar in cleared and uncleared areas, the types of species differed. Notably, more endangered species were found in forests that were not cleared after a storm.
Over 500,000 insects and arthropods were collected, representing more than 1,600 species. This dataset, gathered over two decades, is the most comprehensive of its kind in the world. It is also the first time arthropods have been systematically collected over such an extended period.
- Read the full Keystone news article on Nau.chExternal link (in German)
Picture of the day
We close this Friday’s briefing with the picturesque Moelson mountain in Bulle, in canton Fribourg. Wishing you a wonderful weekend!
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