Unions lend weight to fight against corporate tax reforms

Demonstrators protest against the original tax reform plan early last year. © KEYSTONE / SALVATORE DI NOLFI

Trade unions and leftwing political parties have announced their intention of fighting proposed corporate tax reforms in Switzerland with a public vote. The plan to overhaul company tax rules was tweaked following the rejection of a previous package of measures by a 2017 initiative.

But the consortium of critics on Saturday said that parliament’s approval of Tax Project 17 (TP17) showed it had “completely forgotten” the lessons of last year’s vote. Switzerland faces intense pressure from the European Union to stamp out the current “anti-competitive” practice of cantons taxing the foreign-derived income of multinationals at low rates.

+ Swiss corporate tax reform plan explained

Following the rejection of the first plan, a new draft has stripped out some of the more controversial elements that were perceived by the Swiss public to be loopholes for companies to exploit. TP17 also contains a new provision to inject CHF2 billion into the old-age state pension plan to compensate for expected lost corporate tax revenues.

But an alliance of the Unia and VPOD unions and the Green Party, the Young Greens, the Young Socialists and the solidaritéS group said the new package simply replaces old loopholes with new ones. It would lead to a fall in public spending on crucial services and encourage cantons to engage in a race to the bottom with lower tax rates, the group said.

The alliance said it would start collecting signatures that would spark a second public vote on the issue. The Young Greens had previously stated their intention of launching a referendum, which would most likely take place in May 2019 if enough signatures are gathered.

The government and business leaders have warned that failure to reform the corporate tax code in the near future could seriously damage Switzerland’s already fragile relationship with the EU and harm the Swiss economy.

EU gun law

The announcement comes a day after Swiss rifle associations said they would challenge a parliamentary decision to bring in line Swiss regulations on gun ownership with European Union law.

The opponents – an alliance of 14 groups, including the rightwing People’s Party – argue the EU rules are undermining Swiss sovereignty and independence.

The EU tightened the laws following a series of attacks by Islamist militants in European cities since 2015.

Last month, the Swiss parliament approved an amended proposal by the government allowing for exceptions on gun ownership, notably for former members of the Swiss militia army.

Both the campaigners against the corporate tax reform and the gun law have 100 days to collect at least 50,000 signatures to force a nationwide vote.