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MONEY

How Switzerland chose the franc as its currency

We carry it in our wallets and use it every day to purchase all kinds of goods and services. But have you ever wondered how the franc became Switzerland’s currency?

Just to think that we could have still been spending ducats or guilders. Photo by Claudio Schwarz on Unsplash
Just to think that we could have still been spending ducats or guilders. Photo by Claudio Schwarz on Unsplash

To answer this question we have to go back to 1849 – the year before was a decisive turning point in the country’s history.

September 12th, 1848 marked the creation of the Swiss federal state and its new Constitution, and Bern became the seat of the government the same year.

READ MORE: Why is Bern the ‘capital’ of Switzerland?

But while many political matters were put in order, some issues still needed to be settled.

For instance, there was much chaos surrounding Switzerland’s regionally-based currencies.

In an article titled “The difficult birth of the Swiss Franc”, Swiss National Museum writes: “If you were travelling through the young federal state in 1849, you had to either have at least ten money purses, or be constantly running to the change money. In Zurich people paid with ducats or thalers, in Schwyz they wanted centimes, and in Chur the bill for your dinner was in batzen”.

Two Zurich ducats. Image: Swiss National Museum

Such a disparate monetary system was not sustainable so a single currency had to be introduced. However, the debate over what system this unified currency should be based on fuelled disputes and sparked controversy.

“It was necessary to choose between the decimal system of the French franc and that of the guilders of southern Germany. This question divided our country: French-speaking Switzerland, Bern and Basel wanted the franc, eastern Switzerland and Zurich wanted the guilder” the article says.

The government commissioned a prominent banker and politician Johann Jakob Speiser to carry out an assessment. He concluded that Swiss monetary system should be based on France’s, as franc would improve Switzerland’s access to the global economy.

The supporters of the guilder, however, didn’t agree and they started to collect signatures on petitions against the French system.

“But all the pleading, begging, cajoling, ranting and cursing was of no use”, the museum article states. 

The parliament introduced the franc and the corresponding federal law on the national currency was enacted in May 1850.

But then “new trouble loomed”: the sitting Helvetia figure created by the Geneva engraver Antoine Bovy angered many politicians. They claimed the figure was too ugly and “unlike the archetypes from antiquity, she wasn’t holding anything in her hand”.

Sitting Helvetia didn’t win over fans. Image: Swiss National Museum

This stance was summed up by the Neue Zuger Zeitung, which wrote that Helvetia “was reaching into every cash register, bag, purse and savings bank and challenging the old money that people had been used to for 100 years”.

The National Council also suggested the “Helvetia that everyone loathes” be removed from the new coins.

But the woman symbolising Switzerland remained in sitting position until 1875. She has been standing ever since.

The decision not to adopt the guilder system turned out to be a good one, the article noted. By the end of 1871, the German Empire adopted the mark as its single currency, and the guilder, thaler and ducat slowly disappeared from circulation.

READ MORE: Why does Switzerland use ‘CH’ and what does it mean?

Member comments

  1. To the editor-I would like to read more about the Swiss WIR currency – but thank you for this informative article!

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For members

MONEY

EXPLAINED: What is ‘church tax’ in Switzerland and do I have to pay it?

Switzerland is one of only a handful of countries where most people must pay taxes to support religious institutions. This is what you should know about it.

EXPLAINED: What is ‘church tax’ in Switzerland and do I have to pay it?

Switzerland is already widely known as a tax haven, but it seems it could be called a tax heaven as well, with millions of Swiss regularly contributing a portion of their wages to religious institutions. 

However, not everyone in Switzerland pays church tax. 

Whether or not you must pay the church tax depends on where you live and what religious denomination you belong to.

If you have moved to a Swiss community, chances are you had to declare your religious affiliation while registering your arrival at the Gemeinde / commune / comunità locale.

And if you identified yourself as a member of a Roman Catholic or Protestant (including Reformed) Church, then you can expect to be slapped with a so-called ecclesiastical tax. 

People in other religions, such as Islam or Judaism, or some of the less common protestant faiths, are not required to pay this tax. 

As is also the case in Austria, Finland, Germany, Denmark and Sweden, Switzerland’s churchgoers must finance the costs of their local churches, with funds ultimately being used to upkeep the facilities, clergy’s salaries, as well as other operating costs.

This is a long-standing and common practice in most cantons, with the exception of Geneva, Neuchâtel, Vaud, and Ticino.

People attending religious institutions of other than Catholic and Protestant denominations, or those living in the four cantons that don’t impose this tax, are free to make a voluntary, tax-deductible contribution to their church, but are not obligated to do so by law.

And it’s not just private individuals who are liable to pay church tax — most cantons, except Basel-City, Schaffhausen, Appenzell Ausserrhoden, and Aargau also levy it on businesses.

READ MORE: Switzerland’s strangest taxes – and what happens if you don’t pay them

This is a somewhat paradoxical situation, as Switzerland recognises the principle of separation of church and state, which would normally preclude public funding of religious groups.

Yet, the country’s main denominations are authorised to collect church taxes; in fact, Swiss Constitution expressly allows cantons to regulate the relationship between church and state on their territories — including the right to levy taxes.

How much is this tax and do you have to pay it?

Again, the amount depends on the canton you live in, but on average it is 15 percent of the income and wealth tax for Roman Catholics and 10 percent for those attending Protestant churches.

If you officially declared your religious affiliation and if you live in a canton other than Geneva, Neuchâtel, Ticino, and Vaud, then yes, you must pay this tax.

How do you opt out of paying the tax?

There is, however, a relatively simple way to opt out of the church tax.

If you move to a new community, just don’t declare yourself as a member of either a Roman Catholic or Protestant parish.

If you already have done so, then send a registered letter to the parish in your municipality and inform them that you are no longer a member of the church.

Importantly, if you have already declared yourself a member of the church in one municipality, this information will follow you to your next municipality, i.e. the communes will pass on information between each other. 

Therefore, simply moving a declaring no religious status will be insufficient. You will need to send the resignation letter. 

Send a copy of this letter to your cantonal tax office. If you are in Valais, you should send your letter to the baptism parish. 

A copy of the form you need to send is available here (in German). 

You don’t have to give a reason why you chose to leave the church; certainly don’t mention it is because you don’t want to pay taxes!

READ MORE: How to navigate your way to a lower Swiss tax bill

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