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Finance minister makes new bid to reform company tax

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Finance minister makes new bid to reform company tax
Many international firms, like Nestlé, are headquartered in Switzerland. Photo: Fabrice Coffrini/AFP
08:53 CEST+02:00
Finance Minister Ueli Maurer has presented his plan B for a new corporate tax after the last attempt at a change to the law was thrown out by voters.

The plan includes raising family allowances in a move seen as sweetening the pill for voters, who overwhelmingly rejected the previous corporate tax reform in a nationwide vote on February 13th, according to media reports.

That result was a heavy blow to the government, which was under pressure to come up with a plan B to tackle concerns over Swiss corporate tax system.

READ ALSO: Swiss government's tax reform plan crushed by voters

Maurer and representatives of the cantons outlined the new tax regulations in parliament on Thursday. The reform is aimed at making Switzerland more competitive and is planned to be in place by 2019.

The minister, who hopes to avoid another public vote, spoke of the need to find “a Swiss compromise”, although he warned the plan would not be popular with everyone.

The new proposals foresee a higher tax on dividends, which should bring in 400 million francs in extra revenue a year, addressing voters concerns that tax reform would leave a large hole in federal and cantonal finances that the public would ultimately have to make up.

Maurer also proposed raising children’s allowances, which are financed by companies, to a minimum of 230 francs a month.

Ten, mainly western, Swiss cantons are already paying children’s allowances at this level, but the remainder will have to raise their allowance levels.

The move should appeal to voters angered by a perception that the middle class is struggling while companies make massive profits.

February's rejected reform plan had aimed to bring tax rates for domestic and multinational firms in line, as well as create new deductions for innovation, research and development.

The Organisation for Economic Cooperation and Development (OECD) argues Switzerland's current system is anti-competitive since foreign companies are treated more favourably than domestic ones.

READ ALSO: EU 'disappointed' in Swiss rejection of corporate tax reform 

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