Swiss House backs VAT hike; rejects mixed financing for 13th pension

Parliament increases VAT for the 13th AVS pension Keystone-SDA

On Wednesday, the Swiss House of Representatives rejected the proposal for mixed funding of the 13th payment of the Swiss old-age and survivors' (AHV/AVS) pension. It accepted only the 0.4-point increase in Value Added Tax (VAT), but not the 0.2-point rise in employees’ contributions.

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The VAT increase was approved by 104 votes to 87. However, the House refused to make any changes to salaries by 98 votes to 96, with 4 abstentions.

Throughout the debates, the House had maintained that funding should come solely from a VAT increase. The Swiss People’s Party, the Radical-Liberal party and the Liberal-Green party had their way. The left criticised the right for rejecting dual funding with a single aim: to raise the retirement age.

Interior Minister Elisabeth Baume-Schneider pointed out that the funding would not come into effect until 2028. Two pension payments would be made without funding, amounting to CHF9 billion ($11.3 billion). Higher revenue will be required thereafter to restore the fund to its previous level. However, she assured, “the 13th pension will be paid from December”.

Both parliamentary chambers will have to confirm this on Friday during the final vote.

Translated from German by AI/jdp

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