Swiss edge closer to tax hike for rich foreigners

Switzerland took a step towards higher taxes on 5,000 wealthy foreign residents, with the upper chamber of parliament approving a bill for a higher tax rate on Tuesday.

The text will now be put to the lower chamber, where Socialists are however expected to try to block the adoption of the bill, as they want preferential tax treatment for foreigners scrapped completely.

Switzerland has come under pressure from its neighbours — many of which have depleted state coffers — as well as from some of its own citizens over its flat rate tax system that has attracted the wealthiest to claim residency here.

Among them are celebrities such as Phil Collins and Formula 1 champion Michael Schumacher.

In a bid to counter increasing opposition to the flat tax system, the Swiss govenrment has put forward proposals to make these wealthy foreigners pay more, although not too much so as to avoid causing them to leave.

This group of taxpayers contributes about 668 million francs ($727 millio) a year to Swiss state revenues.

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