What is ‘Covid solidarity tax’ and should Switzerland impose it?

What is 'Covid solidarity tax' and should Switzerland impose it?
Should profitable companies pay solidarity tax? Photo by AFP
The idea of the so-called ‘Covid-19 solidarity tax’ continues to stir controversy in Switzerland. What is the idea behind it and what is it supposed to achieve?

The tax is the brainchild of Switzerland’s left-leaning political groups that want it to be imposed on companies which have profited from the coronavirus crisis.

Among them are pharmaceutical corporations as well as online retailers that made profits during the pandemic while other businesses faltered.

Green and Social Democratic parties say the virus has boosted these companies’ revenues, so it would be fair that they pay additional tax as a gesture of solidarity.

According to MP Sophie Michaud-Gigon from the Green Party, “there is certain logic in this tax, especially in the retail sector, where small businesses and markets have not been able to generate the usual income, and consumers have therefore turned to supermarkets and online sales”.

READ MORE: IN NUMBERS: Reasons to be optimistic about the coronavirus situation in Switzerland 

However, business groups and most political parties are opposed to such a measure because they believe that companies which were able to make profit during the health crisis — and which continue to pay taxes on the income they earned — should not be punished.

National councillor Céline Amaudruz from the Swiss People’s Party said that “we can only encourage certain companies to help the less fortunate ones. But it is out of the question to create new taxes”.

While the proposal for solidarity taxes is brought up as the second wave of Covid-19 has shut down certain businesses — bars and restaurants among them — the idea is not new.

It was already raised during the first wave in the spring when Christian Levrat from the Social Democratic Party suggested that rich individuals should assume the costs of the crisis. 

While there are no official moves to implement this idea, a recent poll by RTS public broadcaster showed that most respondents believe solidarity tax is fair in current circumstances. 

 

 


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