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Referendums For Members

Pensions, farming and tax: What issues will the Swiss vote on on Sunday?

Helena Bachmann
Helena Bachmann - [email protected]
Pensions, farming and tax: What issues will the Swiss vote on on Sunday?
Farm animals in Switzerland have a good life, the government claims. Image by William Dais from Pixabay

On Sunday September 25th, Swiss voters will head to the polls again to weigh in on three issues of national importance. This is what’s at stake.

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Three issues will be “on the agenda” in the third round of federal referendums scheduled for 2022.

Here’s an overview of what  the Swiss will vote on September 25th:

OASI reform

OASI is a term for the old age and survivors' insurance which, according to the government, “is the cornerstone of the Swiss social insurance system. It grants pensions of two basic types: old age pensions to people of retirement age [AHV / AVS], and so-called survivors' pensions to spouses or dependent children of a deceased insured person".

This reform would provide for a higher value added tax (VAT) — currently at 7.7 percent —  to finance the scheme, and a modification of the federal law on AHV / AVS, particularly in relation to increasing the retirement age for women from the current 64 to 65, same as for men.

This issue is important to anyone working and planning to retire in Switzerland, as without a new influx of funds, the Swiss pension system could plunge into the red within a few years, “because baby boomers are reaching retirement age and life expectancy is rising", the Federal Council says.

While the government recommends that voters accept this reform, trade unions and left-wing parties are against it, arguing that the new system, especially the higher retirement age, would be “detrimental to women” and low-income people.

READ MORE: Switzerland’s retirees risk losing a whole month’s pension

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Industrial farming

Another issue to be decided on at the polls is whether  industrial farming should be banned in Switzerland.

The committee behind this proposal, consisting mainly of animal welfare groups, claims that “many of the animals live out their short lives in large, factory-like fattening operations” — a practice that should be outlawed.

The government, on the other hand, maintains that such farming practices are already banned by the current legislation, and “more and more farm animals live in specially animal-friendly pens and have regular access to the outdoors".

Amendment to the Federal Act on Withholding Tax

According to the government, Switzerland "levies a withholding tax of 35 percent on income from interest. People living in Switzerland can claim this tax back if they declare the interest in their tax return.  Withholding tax is only due on interest from bonds if the bonds were issued in Switzerland. This is a disadvantage for the Swiss economy, because in order to raise money, many companies issue their bonds in countries where no withholding tax is levied".

The government goes on to explain that Swiss companies should be encouraged to issue bonds in Switzerland, and the amendment would exempt domestic bonds from withholding tax, making them more attractive for investors and benefit the Swiss economy in the long run.

However the left and trade unions oppose this amendment, arguing that it would favour multinational companies and rich individuals in general.

READ MORE: How Switzerland’s direct democracy system works

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