| 20 April 2024, Saturday |

Swiss referendum set to back global minimum corporate tax, climate goals

Swiss voters appeared set to support measures to impose a worldwide minimum tax on firms and a climate bill aimed at reducing fossil fuel usage and reaching zero emissions by 2050, according to forecasts from state broadcaster SRF on Sunday.

Based on tallied votes, 88% of those who voted in Sunday’s national referendum favored raising the country’s corporate tax to the worldwide minimum rate of 15%, up from the current average minimum of 11%, while 55% supported the climate bill.

The results of the vote were expected later on Sunday.

In 2021, Switzerland joined almost 140 countries that signed up to an Organisation for Economic Cooperation and Development (OECD) deal to set a minimum tax rate for big companies, a move aimed at limiting the practice of shifting profits to low tax countries.

Even with the increase Switzerland will still have one of the lowest corporate tax levels in the world, and the proposal, estimated to bring 2.5 billion Swiss francs ($2.80 billion) per year in additional revenue, has been backed by business groups, most political parties, and the general public.

The climate law, brought back in a modified form after it was rejected in 2021 as too costly, has stirred up more debate with those campaigning against it gaining traction in recent weeks.

Proponents say the law is the minimum the wealthy country needs to do to prove its commitment to fighting climate change while opponents from the right wing People’s Party say it will jeopardise energy security.

The projections from Sunday’s referendum also suggested voter approval for an extension of some provisions of the country’s emergency COVID-19 law, required under Switzerland’s system of direct democracy, where legislation is put to the public vote.

Switzerland is home to the offices and headquarters of around 2,000 foreign companies, including Google (GOOGL.O) as well as 200 Swiss multinationals, such as Nestle (NESN.S). While all would be affected, business groups have welcomed the greater degree of certainty that the new tax would bring, even if Switzerland lost some of its low-tax allure.

“No other country is going to have lower taxes either. We want the additional tax revenue to stay in the country, and be used to improve its attractiveness for businesses,” said Christian Frey, from Economiesuisse, a lobby group.

  • Reuters