Import duty on cars, clothes and other products may be scrapped

Industrial products, including cars, will be affected. © Keystone / Gaetan Bally

Import duties on various products including cars, clothes, and household appliances are set to be removed in Switzerland. If parliament approves the plan, the measure will enter into force in 2022.

Economics Minister Guy Parmelin announced the plan on Wednesday after what the government described as a very positive consultation process with stakeholders.

The removal of the duties on a range of industrial products, which also includes bicycles and healthcare products, is part of a range of measures announced last year to tackle Switzerland’s unenviable status as a “high-price island”.

Consumers and businesses will directly benefit, the government said. It also expects that lost state tax receipts will be partly compensated by increased spending and commercial activity.

Tax income on such imports have been on average around CHF500 million ($500.4 million) annually over the past few years; the government expects positive impacts for consumers and businesses to the tune of some CHF860 million.

Though customs duties on industrial products is relatively low, at 1.8% on average, certain products such as textiles (5.6%) and clothing (4%) are more heavily levied.

Industrial goods also include some raw materials and part-built products that enter the country to be completed in Swiss factories. They generally do not include agricultural products, although the government has also pledged to lower duties on selected imports such as bananas and other exotic fruits.

Swiss consumers have long endured having to pay between 40% and 70% more for items in their shopping basket than in neighbouring countries. Companies also complain they are charged more for the same supplies than EU competitors.