14th Annual Meeting of the OECD Network on Fiscal Relations Across Levels of Government, 19-20 November 2018

1. Federal Department of Finance FDF
Federal Finance Administration FFA
Recent Reforms in Switzerland
Tour de Table Discussion
19 November 2018
Werner Weber
Swiss Federal Finance Administration

2. 2
Federal Department of Finance FDF
Federal Finance Administration FFA
Reform of the Fiscal Equalization
Scheme
• Existing system: parliament takes decision on
funding for 4 years (discretionary element);
redistribution goal: 85% of national average (not
mandatory).
• New system: redistribution goal 86.5% of national
average (guaranteed); funding depends on goal and
evolution of disparities (endogenous)
=> reform towards more rule-based system

3. 3
Federal Department of Finance FDF
Federal Finance Administration FFA
• Encompassing reform rejected in February 2017
• International acceptance issues call for new reform
• Key elements (no ringfencing, patent box) as in
previous reform; new element: reform of pension
scheme
• Cantons have to adjust their tax strategy (tax rates)
• «Burdensharing»: loss of revenue is to be shared by
the 2 levels of gvt (=> adjustment of revenue
sharing)
• Technical adjustment of fiscal equalization scheme
• Parliament approved reform in 2018; subject to
referendum?
• New reform to become effective in 2020
Corporate Tax Reform

4. 4
Federal Department of Finance FDF
Federal Finance Administration FFA
Assignment of tasks between Federal
Gvt and Cantons
• Encompassing reform in 2008: disentanglement of
tasks (national defence, highways, social welfare)
• Numerous shared tasks: education, social welfare,
transportation, environment
• Assignment of tasks according to subsidiarity and
fiscal equivalence
• Ongoing discussion about disentanglement of tasks
(social welfare, transportation), compensation
between levels of gvt (increased revenue sharing)