Swiss government’s tax reform plan crushed by voters

The government lost an important referendum on Sunday as Swiss voters disagreed with a plan to reform the corporate tax system.

Swiss government’s tax reform plan crushed by voters
Food giant Nestle is headquartered in Vevey. Photo: Fabrice Coffrini/AFP
Only four out of 26 cantons said yes to the proposal, while 59.1 percent of voters – 1.4 million people – opposed the plan.
The government’s plan aimed to bring in line tax rates for domestic and multinational firms, as well as creating new deductions for innovation, research and development that aimed to strengthen the country’s competitiveness and attractiveness to foreign firms, argued backers.
But the voting public largely agreed with opponents on the political left who said the reform would leave a large hole in federal and cantonal finances that the public would ultimately have to make up.
The defeat is a heavy blow for the government, which must now come up with a plan b to tackle concerns over its corporate tax system from the Organisation for Economic Cooperation and Development (OECD), which argues Switzerland’s current system is anti-competitive since foreign companies are treated more favourably than domestic ones.
Switzerland had agreed to quash that imbalance by 2019, and this internationally-accepted reform would have addressed the issue. 
The reform’s rejection throws the country into a period of uncertainty, with some regions that are economically dependent on multinationals facing the prospect that those companies may now choose to leave the country.  
“There is now a real danger that Switzerland will disappear from the radar of international companies,” finance minister Ueli Maurer was quoted as saying Sunday by the RTS public broadcaster.
There is even a risk of Switzerland's “blacklisting” by the OECD and European Union, the Zurich-based chief of PricewaterhouseCoopers, Andreas Staubli, was quoted as saying by the Bloomberg news agency.
Swissmen, which represents the mechanical and electrical engineering industry, said in a statement that the government should “quickly find a solution for a new reform plan”, warning that Sunday's vote had plunged companies into “a great deal of uncertainty.”
Speaking to Le Temps, Geneva MP Benôit Genecand said though multinationals are a vital part of the local economy and many people’s lives, the wider population clearly doesn’t register this. 
“This defeat shows that it’s not enough to say we want to keep multinationals, we must explain why,” he said.
The Swiss press were scathing in their judgment on the government and finance Ueli Maurer in particular, calling the defeat a debacle and a ‘Waterloo’ moment for Maurer. 
In a statement the Socialist Party, which opposed the reform, said the referendum had “shown the red card to arrogance” and claimed the days of giving sweetheart deals to powerful corporations were “no longer tolerated.”
The party however said it was committed to working with the government in generating a new plan to address both the OECD and EU concerns, while also appealing to voters.

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German anti-noise campaigners are ‘Taliban’: Swiss minister

Swiss government minister Doris Leuthard has caused a furore by comparing southern German anti-airport noise campaigners with Taliban terrorists during a panel discussion in Zürich on Monday.

German anti-noise campaigners are 'Taliban': Swiss minister

Speaking at a debate with Volker Kauder, head of the German CDU’s (Christian Democratic Union) parliamentary group, Leuthard said the German activists were like “the Taliban, who are trying to sabotage Zürich airport“.

Volker Kauder and his brother Siegfried, also a CDU politician, both live in Villingen-Schwennigen near the Swiss-German border and are among the most vocal critics of what they view as the excessive noise levels emanating from Zürich airport.

Leuthard’s comments elicited a strong reaction both in Germany and Switzerland after they were published in the media of both countries.

While in Germany her words were strongly criticised, in Switzerland many applauded her “clear language“, according to Tages Anzeiger newspaper, which has over 500 comments in its online forum.

“Finally a Swiss politician is speaking in the tone that is understood in Germany“, one commenter wrote.

Some commenters said they could see the funny side of Leuthard’s comment: “We have to laugh at these things.” To others, her “clear words” were “tactless, off-colour, and misplaced“.

Siegfried Kauder expressed outrage at the minister’s comment.

“Absolutely tasteless“, he told the Tages Anzeiger. “She has grossly insulted German politics with her comment.“

This is “neither normal political nor diplomatic speech“, he told Swiss newspaper Der Bund, adding that he wanted nothing more to do with the Swiss minister.

Leuthard has struck a nerve in the sometimes tense political relationship between Switzerland and Germany.

Local authorities in Waldshut, where the Kauders grew up on the Swiss-German border, informed the minister in a statement that “she should change her tune and pull in her horns”.

“In the heat of the Swiss election campaign, minister Leuthard should control herself,” according to the Waldshut statement.

Der Bund newspaper said the last signs from Berlin were that Germany wanted to come to an agreement with Switzerland about the airport row, but southern German politicians are sticking to their guns, according to Siegfried Kauder.

Studies have shown that southern Germany is much less affected by airport noise than the greater Zürich region, and Siegfried Kauder agreed that the level of noise pollution in his region varied:

“Sometimes one hears nothing, other times one thinks that a machine is landing in the garden. I can gladly invite you and wake you at 5am if you are not already awake,“ he told Der Bund.

The Kauders are supporting a petition that has so far garnered 80,000 signatures to have the number of flights over southern Germany curtailed.

14 percent of all passengers flying from Zürich airport live in Germany and many fly from Zürich on holidays or commute to Switzerland for work, 20 Minuten newspaper reports.