In 2022, together, Switzerland’s cantons were expected to spend CHF 1.1 billion more than they brought in from taxes. Instead, they made a collective profit of CHF 3.5 billion, a positive delta of CHF 4.6 billion, reported RTS.
Switzerland collects tax at three levels: municipal, cantonal and federal. Cantonal taxes are typically the largest slice. This money covers the cost of key services such as health, education and welfare.
In 2022, a total of 16 of Switzerland’s cantons had expected to register losses. In the end all 26 made a profit. Only two, Nidwalden and Neuchâtel disappointed. Nidwalden budgeted a profit of CHF 1.5 million but only reached a profit of CHF 1 million. Neuchâtel budgeted a profit of CHF 10 million but only reached a profit of CHF 6 million.
The biggest surprises were in Zurich, Geneva and Bern. Zurich, which expected a loss of CHF 523 million ended up with a profit of CHF 543 million. Geneva, which expected a loss of CHF 93 million ended up with a profit of CHF 727 million, and Bern delivered a profit of CHF 358 million after expecting a loss of CHF 88 million. Vaud budgeted a loss of CHF 188 million but made CHF 1 million.
A key a driver of the positive surprises was a windfall from the Swiss National Bank (SNB) – as part of its quantitative easing programme the SNB bought assets, which appreciated in value and delivered a profit. Since then these asset values have tumbled and the SNB has registered large losses. However, bumper profits in 2021 allowed the SNB to dish out CHF 4 billion in 2022. Large losses in 2022 mean no windfall in 2023.
In addition, budgets for 2022 were drawn up during the pandemic when the future was more uncertain.
Record low unemployment has help to keep people off welfare, which has eased public spending.
Other canton specific factors have played a role too. Geneva is home to a number of commodities trading companies and has benefited from bumper profits in the sector.