Monday, February 09, 2009

Zurich voters abolish tax breaks for rich foreigners

Good news from Swissinfo, on something that we blogged recently.

"Zurich is to do away with tax privileges for wealthy foreigners, a policy which has attracted a host of super-rich celebrities to the canton.

On Sunday voters unexpectedly endorsed a proposal by centre-left political parties to abolish lump sum taxation. Nearly 53 per cent of voters came out in favour of scrapping tax perks – in the first ballot held on the issue."

The Times of India reported:

"It was the first time that the group had won a referendum in Zurich, the home of Switzerland's secretive and rather more conservative banking and finance establishment. The result obliges cantonal authorities to change local tax laws.

The tax break has helped lure dozens of international sports, entertainment and business celebrities to Switzerland. In Zurich, 137 people benefitted from the deal in 2006, the Swiss news agency ATS reported."

Democracy is a fine thing, and it seems to be alive in Switzerland. The referendum was matched by another, seen as a bigger deal (the tax referendum, while sending an important signal, will only affect 137 rich foreigners in Zurich, it seems) - a large vote in favour of a key labour accord with the European Union. As Swissinfo put it:

"A no vote would have ended a series of economic accords laboriously hashed out between Switzerland and the EU and hampered relations already strained over Switzerland's banking secrecy laws."

Switzerland is not a member of the EU but it has concluded 20 major bilateral agreements with the 27-nation bloc. There are also about 100 secondary bilateral accords between Bern and Brussels. Negotiations are underway for a bilateral treaty aimed at regulating access to cross-border electricity and a free trade accord on agriculture. In 1992 voters rejected a plan to join the European Economic Area (EEA), a halfway house to full EU membership.


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