Planned Swiss VAT Increase Seen As 'Manageable Sacrifice'

“We're talking about CHF0.80 ($1.03) for a purchase of CHF100,” Pfister said in an interview with the Neue Zürcher Zeitung (NZZ) on Monday. Other European countries were investing significantly more in security, he said.

“We are currently under-equipped,” the defence minister said. Although he senses this understanding on all sides, action must now be taken, he said.

If this does not happen, Switzerland would have a problem, according to Pfister.“Plan B means less security for Switzerland. We would be taking a big risk.” Switzerland is not really a country that voluntarily takes major risks, says Pfister.“We have a long tradition of risk avoidance.”

According to the government, Switzerland will need around CHF31 billion to strengthen security from 2028. The national government wants to compensate for this additional expenditure by increasing VAT by 0.8 percentage points for a period of ten years, as it announced at the end of January.

+ Value added tax: the Swiss government's all-purpose tool

The defence ministry is to work out the details by the end of March. Parliament is then expected to deal with the matter next winter. The people and the cantons will have the final say, as a constitutional amendment is required for a VAT increase. The vote is planned for summer 2027.

In a survey published around a fortnight ago by the opinion research institute Sotomo on behalf of newspaper Blick, 76% of respondents said they were clearly or somewhat opposed to the proposal.

Despite the upcoming referendum campaign, Pfister says he wants to create full transparency about problems with his department's projects. Of course, the temptation to simply draw a rose-coloured curtain over all projects is great in view of such a vote, he told the NZZ,“but my conviction is clear: we must not lie to the people – even if that means we have to address unpleasant truths”.

Adapted from German by AI/ts