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MILITARY

Calls in Switzerland for foreign residents to help finance Swiss army

Switzerland’s military needs to increase its budget to improve its operational capability, and wants foreign men to help bankroll it.

Calls in Switzerland for foreign residents to help finance Swiss army
A member of the Swiss army during a presentation of military equipment intended for acquisition. Photo by STEFAN WERMUTH / AFP

To be able to defend the country in case of an invasion, Swiss military needs more ammunition and equipment (other than army knife), costing about 4 billion francs.

The parliament is currently debating where this money should come from, and deputies from the right-wing Swiss People’s Party (SVP) came up with a potential revenue source.

They are calling for foreign men who live in Switzerland to pay a so-called “security tax,” to be used for the needs of the army.

It can be likened to the military exemption tax levied on Swiss nationals who are deemed unfit for service.

In 2023, 196,800 Swiss men paid an average 863 francs per person as part of the exemption fee.  

With the introduction of the “security tax,” that number would increase to 389,000 people, who would contribute hundreds of millions of francs to the army’s coffers.

‘Worth examining’

The SVP is not the only party supporting this move.

MPs from the Liberal-Radical (FDP) and Centre parties also agree with this proposal, especially as “there are many foreigners who grow up in Switzerland and postpone their naturalisation so that they don’t have to do military service,” said FDP deputy Heinz Theiler.  “But our security is not free.”

“It is an idea worth examining,” added another FDP legislator,  Martin Candinas.

However, not everyone is in favour of this move.

“I understand that the army is trying to get more resources,” said Priska Seiler-Graf from the Social Democratic Party, who presides the National Council’s Security Policy Commission.

“But is it really realistic to assume that Russians will end up on the banks of the Rhine with their tanks, when they would have to first cross the solid NATO barrier?”

How likely is this ‘security tax’ for foreigners to be implemented?

The SVP’s proposal is not a new one: the party had already submitted a parliamentary initiative to this effect more than a decade ago, which the National Council turned down in June 2011.

A key argument against it was that ensuring the public’s security is government’s responsibility, which is financed through taxes, and therefore foreign residents already contribute to the costs of the army.

And even if the SVP wins a majority in parliament for its cause, the road towards implementation would be a long one.

A referendum would have to be held, as the constitution stipulates that only Swiss citizens who do not perform military service should be taxed.

And that brings us to a related issue:

Switzerland’s Federal Court has recently decided that men who were naturalised in Switzerland  in their 30s — that is, too late to actually serve in the military — will have to pay the military exemption tax.

This obligation puts them on equal footing with other Swiss men who are exempted from the required military or civil service, which usually begins at the age of 18, because they are deemed unfit for service.

READ ALSO: Naturalised Swiss citizens to pay ‘army tax’ if they skip military service
 

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ZURICH

Zurich homeowners to pay significantly higher property taxes

Properties are more expensive in Zurich than almost anywhere else in Switzerland, but a planned new charge will place further financial burdens on the canton’s homeowners.

Zurich homeowners to pay significantly higher property taxes

Because Zurich is re-evaluating all properties, homeowners will have to brace themselves for significantly higher tax bills from 2027, cantonal authorities announced onTuesday. 

This step was triggered by two court rulings, according to which many properties in the canton were undervalued. The last estimate took place in 2009, but real estate prices have soared by an estimated 50 percent since then.

Therefore, property tax values are to increase by an average of 48 percent, while  imputed rental values for single-family homes will rise by an average of 11 percent and for apartments by 10 percent.

With this measure, the canton and municipalities can expect additional income of 85 million each.

What is the imputed rental value?

It is a tax term used to describe the theoretical rental value that you would have to pay if you were renting your own property.

In Switzerland, this value is used to calculate taxes, even if you live in your own apartment or house and do not pay rent.

For owner-occupied apartments in the canton of Zurich, the imputed rental value is 4.25 percent of the tax value. For single-family homes, it is 3.5 percent.

Authorities get ready for more ‘hardship’ cases

As a result of this tax hike, a larger number of hardship cases — that is, people who won’t be able to afford higher property taxes — the cantonal government is calling for the introduction of a ‘hardship regulation.’

Under this measure, a tax charge on the imputed rental value should be anchored in the law if it leads to an excessive tax burden in relation to the household income and assets.

The current cantonal hardship regulation serves as a transitional solution, which is in effect until legal basis is enacted at a federal level.

READ ALSO: How fast are property prices rising in Zurich in 2024? 

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