Saturday , June 19 2021
Home / le News / Swiss government forecasts 2021 deficit but no tax hikes

Swiss government forecasts 2021 deficit but no tax hikes

Summary:
The coronavirus is set to knock a CHF 1 billion hole in Switzerland’s federal budget for 2021, according to a press release. © | Dreamstime.comWithout the virus the budget was CHF 2.2 billion in the black. Post virus the budget is now CHF 1 billion in the red. The virus is expected to add CHF 2.0 billion to next years spending. The extra money is earmarked for SARS-CoV-2 tests, business loan guarantees and support to the sports sector. The Federal Council is confident that the extra money borrowed to cover Covid-19 expenditure can be paid back without raising taxes. Switzerland’s federal spending is constrained by a mechanism known as the debt brake. The mechanism allows some flexibility to account for business cycles. The brake allows a temporary deficit of up to CHF 3.3

Topics:
Investec considers the following as important: , , , ,

This could be interesting, too:

Investec writes Basel to become the fifth canton with a minimum wage

Investec writes Swiss to vote on CO2 taxes. How much could it cost?

Investec writes Swiss Unemployment Continues to Fall in May

Investec writes Swiss unemployment continues to fall in May

The coronavirus is set to knock a CHF 1 billion hole in Switzerland’s federal budget for 2021, according to a press release.

Swiss government forecasts 2021 deficit but no tax hikes
© | Dreamstime.com

Without the virus the budget was CHF 2.2 billion in the black. Post virus the budget is now CHF 1 billion in the red. The virus is expected to add CHF 2.0 billion to next years spending. The extra money is earmarked for SARS-CoV-2 tests, business loan guarantees and support to the sports sector.

The Federal Council is confident that the extra money borrowed to cover Covid-19 expenditure can be paid back without raising taxes.

Switzerland’s federal spending is constrained by a mechanism known as the debt brake. The mechanism allows some flexibility to account for business cycles. The brake allows a temporary deficit of up to CHF 3.3 billion, however, deficits today reduce the scope for deficits in the future.

The government will make a definitive decision on the budget over the summer and decide on future Covid-19 debt repayments at the end of the year.

More on this:
Government press release (in French) – Take a 5 minute French test now

For more stories like this on Switzerland follow us on Facebook and Twitter.

About Investec
Investec
Investec is a distinctive Specialist Bank and Asset Manager. We provide a diverse range of financial products and services to our niche client base.

Leave a Reply

Your email address will not be published. Required fields are marked *