Swiss voters have made a significant decision to introduce a global minimum tax on businesses and a climate law targeting zero emissions by 2050. In a national referendum, 79% voted to raise the business tax from an average minimum of 11% to the global minimum rate of 15%. This move aligns with an Organisation for Economic Cooperation and Development (OECD) agreement to set a minimum tax rate for large companies, aimed at curbing profit shifting to low-tax countries.
Despite the tax increase, Switzerland will maintain one of the world’s lowest corporate tax levels. The new tax rate is expected to generate an additional 2.5 billion Swiss francs ($2.80 billion) per year in revenue, a move supported by business groups, political parties, and the public.
The climate law, which aims to reduce fossil fuel use and achieve zero emissions by 2050, was also approved by 59% of voters. This law has sparked more debate, with supporters arguing it’s a necessary step in combating climate change, while critics worry about its impact on energy security.
THINK LIKE AN ECONOMIST!
Q1. Define the term direct tax.
Q2. Explain one impact of increasing corporation tax on the fiscal budget.
Q3. Analyse the impact of increasing corporation tax on the supply of MNCs.
Q4. Discuss whether increasing corporation tax will have a negative impact on economic growth in Switzerland.
Click here for the source article
