13th AHV pension: the Federal Council advocates an increase in VAT
Keystone-SDA
The Swiss government has supported an increase in Value-Added Tax (VAT) to pay for the 13th payment of the Swiss old-age and survivors’ (AHV/AVS) pension.
On Monday, the government advocated a rise of 0.4 percentage points, from 8.1% to 8.5%, ahead of the referendum on November 29. A double majority will be required for the vote.
To fund the 13th AHV/AVS pension, which will be paid from December 1, CHF4.2 billion ($5.06 billion) will be required in 2026. This figure is expected to rise to around CHF4.5 billion in 2030 and CHF5.4 billion in 2040.
Parliament has opted for funding solely through VAT, rejecting a parallel 0.2-point increase in employees’ contributions. The 0.4-point rise in VAT will generate CHF1.5 billion per year.
+ Swiss Senate backs mixed financing for 13th pension
The reduced rate will remain at 2.6%. The VAT increase for the accommodation sector will be 0.2 percentage points, rising from 3.8% to 4%.
This change will not be sufficient in the long term. In its AHV2030 reform proposal, the government has included a scenario for additional funding for the 13th pension. Both the left and the right have voiced criticism.
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Translated from German, reviewed by an English Department journalist.
