Swiss government proposes financing 13th pension payment with higher VAT

Swiss parliament. Keystone / Alessandro Della Valle

The 13th monthly pension payment is to be financed by higher value-added tax (VAT), the Swiss government has suggested. It will not decide how much the VAT should be increased until the autumn.

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The government said on Wednesday it had taken into account the revised financial outlook for the old-age and survivors’ (OASI) state pension scheme. Expenditure on OASI is likely to be around CHF4 billion ($4.6 billion) lower in 2033 than previously assumed. The government therefore considers the increase in VAT to be appropriate for financing the 13th pension payment.

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In the consultation process it had put two financing options up for discussion: one with higher salary contributions alone, and a combination of higher salary contributions and more VAT. However, in view of the consultation process that ended at the beginning of July, the increase in VAT is likely to have a difficult time in parliament.

The government has relented somewhat on the federal contribution to higher OASI expenditure: Instead of reducing expenditure from 20.2% to 18.7%, it is now proposing a reduction to 19.5%. This means that the federal budget will contribute around CHF500 million to the 13th pension in 2030.

The government intends to present its message to parliament in the autumn. The two chambers are due to begin debating the bill in December.

Translated from German by DeepL/ts

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