MPs favour VAT increase to finance rail works

Switzerland’s valued added tax (VAT) looks set to increase to 8.1 percent from eight percent to raise revenues for rail infrastructure.

MPs favour VAT increase to finance rail works
Photo: Kecko

The National Council, the lower house of parliament, voted on Wednesday to approve the hike between 2018 and 2030 in a bid to defray 6.4 billion francs ($6.8 billion) in planned spending to upgrade the national railway system.

The sales tax increase is forecast to raise 300 million francs a year in revenues, the ATS news service reported.

MPs voted 125 to 65 in favour of raising the tax, rejecting other proposals such as the elimination of income tax deductions for commuters.

The majority agreed that it was necessary to raise the extra revenue after the plan on infrastructure spending was virtually doubled.

The federal government previously envisaged spending 3.5 billion francs on rail improvement projects between now and 2025.

The senate earlier backed the VAT increase.

MPs have yet to debate details for infrastructure improvements.

The Swiss association for transport and the environment (VCS) maintains the rail spending plan is not enough.

It earlier launched an initiative, to be puit to a national vote, to boost financing for rail improvements to 11-12 billion francs between now and 2030.

The ATE and 20 partner organizations collected almost 140,000 signatures for the “initiative for public transport”.

The organization complains that trains are already packed with passengers and the situation will not improve under the current plans.

The organization said the current transport funding plan favours roads and will not allow for a policy that respects the environment and the need to combat climate change.

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