BASEL: Switzerland’s measures to end the preferential tax arrangements for foreign companies will reduce tax revenues in the country, according to an Article IV report by the IMF. Under reforms set to be introduced in 2019, Switzerland will harmonize corporate income tax rates at cantonal level, with a rate of about 14 to 15 percent.
While the unification of rates could boost investment by small and medium-sized firms, it is “likely lead to some revenue loss,” the report said, and the tax burden on foreign companies is to increase slightly.
The IMF said “other factors” will continue to ensure Switzerland remains attractive to foreign investors. To buoy the nation’s finances, in early 2017, Switzerland is expected to agree an increase to the VAT rate of about 1 to 1.5 percent, alongside a higher retirement age for women under plans to bolster pension provisions.
The report concluded that the country’s medium term fiscal goals can be met without “an undue increase in taxes.”
