On Sunday, Swiss will be asked to vote on two federal referenda, one on gun laws and another on tax and pension reform.
Following the gun attacks in Paris and Brussels, the EU tightened gun rules in 2017. In 2018, the government of Switzerland, a nation outside the EU but within the Schengen area, changed its laws on guns to reflect european laws. However, the changes do not please everyone. Switzerland has a long tradition of gun ownership and a group known as the Swiss shooting interest group (CIT) called for a referendum on the subject.
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The Federal Council (cabinet) supports the legal changes and a majority – 120 for, 69 against and 4 abstentions – of the National Council (parliament) also supports them.
The government says its gun law changes aim to better protect Switzerland’s population from the misuse of weapons by improving gun identification, more effectively controlling the black market, and improving information exchange across the Schengen area, for example to identify those who have been refused gun ownership in another country. In addition, the Federal Council, Switzerland’s executive, says that without these changes Switzerland’s membership of the Schengen area could end.
CIT argues the legal changes will increase the risk of domestic attacks, usher in the end of recreational shooting and increase the workload of the police force. In addition, it claims the new rules won’t reduce terrorism and that they violate Switzerland’s constitution and the will of the people. It also claims that fears of Switzerland falling out of the Schengen area if it fails to make these changes are unfounded.
Tax and pension reform
Under outside pressure, Switzerland plans to abolish the tax privileges it offers to certain foreign companies, a system designed to attract businesses to the country.
To reduce the risk of companies leaving, cantons will replace this system with lower standard company tax rates, a move that will lower tax revenue.
At the same time, Switzerland’s pay-as-you-go state pension system is headed towards financial meltdown – more people are spending longer in retirement, while the number of workers funding the system via social taxes on their salaries is not keeping up. In 2017, pension payments exceeded receipts by more than CHF 1 billion. The financial hole is expected to be CHF 53 billion between now and 2030.
So where would the money come from to fill the hole left by lower standard company tax rates and the looming hole in state pensions?
The hole from lower company taxes would mainly be funded by the federal government. Bern plans to offer money to the cantons both directly, to the tune of around CHF 1 billion from direct federal tax, and indirectly through changes to the tax equalization mechanism – every year financially weak cantons get money from a central pot funded by contributions from wealthy cantons. The federal government aims to support financially weak cantons in this way with an extra CHF 180 million over seven years. There would be some other changes to tax rules too.
To shore up the pension system, the plan aims to take an extra CHF 2 billion annually from salaries. Social taxes (AVS/AHV) on Swiss salaries would rise by 0.3% – 0.15% employee and 0.15% employer. So an extra CHF 300 a year would be collected from a salary of CHF 100,000.
The Federal Council (cabinet) supports the proposal. In addition, a majority – 112 for, 67 against and 11 abstentions – of the National Council (parliament) also supports the changes.