Switzerland Today
Dear Swiss Abroad,
For years, canton Vaud granted tax rebates to wealthy residents. Investigations later found the practice to be unlawful and to have cost the canton over CHF200 million ($253.80 million) in lost revenue.
The cantonal government, however, has described it as a “theoretical loss”. Had these taxpayers not benefited from favourable treatment, they might have left the canton altogether, the argument goes.
Best wishes from Bern,
In canton Vaud, a long-running illegal tax practice benefiting wealthy foreign residents is causing major political controversy. The canton lost more than CHF200 million ($253.80 million) in revenue. The government now describes the loss as “theoretical”.
For more than twelve years, canton Vaud granted illegal tax rebates to wealthy residents. According to Swiss public broadcaster SRF, the practice cost the canton’s finances around CHF202 million. An official investigation found that almost two-thirds of the roughly 2,800 beneficiaries were not actually entitled to the tax reductions. The money is now gone for good: according to the cantonal government, it is no longer legally possible to reclaim it.
The administration was aware of the questionable practice as early as 2011 but failed to act for a decade. It was only after Vaud minister Valérie Dittli uncovered the affair that the scandal came to light – a development that ultimately cost her responsibility for the finance department. The public prosecutor’s office is now investigating the circumstances surrounding the years of unlawful tax treatment and possible individual responsibilities.
Meanwhile, the government is attempting to downplay the financial impact. President Christelle Luisier Brodard described the missing revenue as a “theoretical loss”, arguing that some wealthy taxpayers might have left the canton had they been taxed correctly. Critics see the statement as a defence of an era in which, under former finance minister Pascal Broulis, political stability appeared to take precedence over the proper application of tax law.
Will rejected asylum-seekers soon be housed far outside Europe? The European Union is planning so-called “return hubs” in third countries – and Switzerland will be affected.
Because of its participation in Europe’s Schengen system, Switzerland is required to adopt the EU’s new Return Regulation. According to media reports, Bern will have two years to implement the changes. While participation in return hubs remains optional, the legal basis for deporting rejected asylum-seekers to third countries will become mandatory.
Switzerland faces a particular challenge in finding suitable partner countries. As Swiss public broadcaster, SRF reports, Bern lacks the negotiating leverage available to Brussels. While the EU can offer accession prospects, Switzerland would have to rely on instruments such as development aid or visa facilitation to persuade third countries to cooperate.
According to the Neue Zürcher Zeitung (NZZ), return hubs are only one aspect of the planned tightening. Rejected asylum-seekers would be required to cooperate with authorities before being transferred. Those who refuse to cooperate, are considered a flight risk or pose a security threat could be detained.
Several major issues were on the agenda of today’s summer session in parliament. The most contentious was individual taxation.
In March, voters approved the principle of individual taxation for married couples. Parliament is now grappling with how to implement the reform. At the same time, the Centre Party continues to promote its own initiative aimed at abolishing the so-called marriage penalty.
Unlike the individual taxation model already approved by voters, the Centre Party’s proposal would maintain joint taxation of married couples while ensuring they are not placed at a disadvantage compared with unmarried couples. The Senate has now recommended rejecting the initiative by a narrow majority.
Another issue concerns young Swiss men living abroad. Dual nationals could find it more difficult in future to avoid compulsory Swiss military service. The House of Representatives is calling for stricter rules for dual citizens, despite opposition from the Federal Council.
Let’s stay with the Swiss federal parliament in Bern for a moment. French-language newspaper Le Temps analysed 200,000 parliamentary speeches from the past 25 years and concluded that anger and fear are increasingly replacing factual arguments.
According to the analysis, emotional rhetoric in the Senate has doubled since 1999. The Swiss People’s Party leads the ranking, with anger accounting for 73% of its emotionally charged speeches. While the Social Democratic Party and the Greens also rely more heavily on emotional language, centrist parties tend to favour messages of hope to gain attention in the digital age.
Political scientist Marc Bühlmann notes that cooperation often remains strong behind closed doors. Friendships sometimes develop between People’s Party and Social Democratic Party members working together in parliamentary committees. Since no party can govern alone in Switzerland, the need for compromise remains stronger in daily political work than public debates may suggest.
According to Le Temps, emotions run particularly high on issues such as agriculture and migration. Transport policy, by contrast, remains surprisingly fact-based, even when projects are controversial. In Switzerland’s system of direct democracy, the strongest slogans often emerge during public referendum campaigns rather than parliamentary debates.
Translated using AI/amva/sb
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