Coronavirus crisis costing Swiss economy 11-17 billion francs per month

Switzerland's central bank chief said in an interview published by Swiss media Sunday that the coronavirus crisis was costing the Swiss economy up to $17 billion each month.

Coronavirus crisis costing Swiss economy 11-17 billion francs per month

The head of the Swiss National Bank, Thomas Jordan, said the crisis surrounding the COVID-19 pandemic was weighing heavily on the Swiss economy, which was currently functioning at just 70-80 percent of its normal level.

“You have to go back to the oil crisis of the 1970s to find such a collapse of growth,” he told the Tamedia group in an interview published by several Swiss papers Sunday.

The impact of the widespread measures put in place in the Alpine nation to halt the spread of the virus was running up “enormous” costs, he said, “to the tune of 11-17 billion Swiss francs ($11.3-$17.5 billion, 10.4-16.1 billion euros) each month.”

Jordan cautioned that the public debt would swell, as would costs linked to unemployment insurance and to the subsidies provided to businesses to keep them afloat, pushing Switzerland towards a significant deficit this year.

The Le Matin Dimanche and SonntagsZeitung weeklies calculated Sunday that Switzerland in all should dish out some 100 billion to mitigate the effects of the crisis.

They pointed out that in April joblessness surged 43 percent compared to the same month in 2019 with some two million people, out of a population of 8.5 million, drawing partial unemployment benefits.

Switzerland has stopped short of ordering full confinement, but introduced a range of emergency measures in mid-March, including closing restaurants and most other businesses, to combat the spread of the novel coronavirus.

The wealthy Alpine nation, which has counted more than 1,500 deaths and over 30,000 infections from COVID-19, has gradually begun lifting measures, with restaurants, shops and schools due to open Monday.

Jordan said the loosening of confinement measures was vital, stressing the need to step up economic activity to keep a handle on the rising debt levels.

“It makes sense that the gradual deconfinement should start now,” he said, insisting that Switzerland's essential education, health and retirement systems “rest on the stability of our economy.”

Jordan said the central bank had been busy intervening in foreign exchange markets to stabilise the value of the Swiss franc which is considered a refuge currency in times of crisis.

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Masks, tests and jabs: Can I deduct Covid-related costs from my taxes in Switzerland?

Switzerland’s tax deadline is just around the corner. Are Covid-related costs tax deductible?

Masks, tests and jabs: Can I deduct Covid-related costs from my taxes in Switzerland?

March 31st is the deadline for filing taxes in Switzerland relating to the 2021 financial year. 

Over the past two years, the Covid pandemic has seen a change in our spending habits. 

While we may have saved on restaurants and travel, we laid out considerable costs on a range of new expenses, including disinfectant, masks and Covid tests. 

As some of these costs are required by law, can they be deducted from your tax?

In some cases, expenses directly related to the Covid pandemic can be deducted. 

Masks, for instance, can be deducted as medical expenses in some cantons, Swiss tax specialist Markus Stoll told 20 Minutes

This depends on the specific framework for tax deductions related to medical expenses in that canton. 

EXPLAINED: What can I deduct from my tax bill in Switzerland?

Generally speaking, any medical costs paid out of pocket can be deducted. However, most cantons impose a minimum percentage limit from which these costs can be deducted. 

In many cantons, this will start at five percent of your yearly income in total (i.e. including other out-of-pocket costs like dental or specialist visits), meaning you would need to purchase a significant amount of masks to beat the threshold. 

What about testing and vaccination?

Testing and vaccinations however were largely free as their costs were covered by the Swiss government, which means associated expenses cannot be deducted. 

Those tests which were not covered by the government – for instance for travel abroad or for visiting clubs – cannot be deducted, Stoll says. 

“Tests for travel abroad or to visit clubs are not deductible” Stoll said. 

For a complete overview of taxation in Switzerland, including several specific guides, please check out our tax-specific page here.