Swiss Set to Reject Tax Hike to Fund Pensions, First Poll Shows
(Bloomberg) — Swiss citizens are leaning toward rejecting an increase in value-added tax to fund higher pensions, sending the government back to the drawing board on how to finance the measure.
About 60% of respondents will probably or definitely vote against the proposal, according to a poll published Wednesday by newspaper group Tamedia/20 Minuten ahead of a Nov. 29 ballot.
Bern proposed the increase of sales tax by 0.4 percentage points after Swiss citizens, against the government’s advice, chose in 2024 to back a union-backed plan to give pensioners a 13th monthly payment starting this December.
The pension initiative didn’t provide a plan to fund the additional annual cost of 4 billion francs ($4.8 billion), and sent ministers scrambling to find the money. They ended up going for the proposed VAT increase from 2028, which officials say will result in additional revenue of around 1.5 billion francs per year.
The right-wing SVP and business-friendly FDP both recommended that citizens reject the bill, and Wednesday’s poll shows that their voters firmly oppose it. Still, support falls short of 50% irrespective of party preference.
A rejection of the VAT increase won’t stop the extra pension payout, but means the government must find alternative funding, potentially via more controversial means.
That could include raising salary-based social security contributions, increasing the government’s financial contribution, and in turn budget cuts in other areas, or raising the retirement age.
The standard rate of Swiss VAT currently is 8.1%. That’s less than half that of any of its European Union neighbors: Germany has a rate of 19%, France and Austria have 20%, and Italy 22%.
Still, the government has also proposed another VAT increase, this time a temporary one from 2028 through 2039, to ramp up the country’s defense spending, though that has yet to be passed by parliament.
The Nov. 29 ballot will also feature a question on a law that relaxes Switzerland’s strict neutrality rules on weapons exports, with the poll showing “no” ahead at 47% versus 44%, with 9% still undecided.
The two final proposals to be voted on next month are both initiatives, triggered by proponents collecting 100,000 signatures:
A ban on loud fireworks looks likely to be passed, backed by 68% in the poll. An initiative to take a different approach to a tax structure that disadvantages double-income couples has just 38% support in the survey. ©2026 Bloomberg L.P.
