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Higher federal tax deductions for health insurance announced

Summary:
Photo by Nataliya Vaitkevich on Pexels.com The cost of Swiss health insurance has risen sharply over the years. However, the amount that can be deducted from income to calculate federal taxes has remained comparatively low. This week, Switzerland’s parliament voted in favour of closing the gap between the standardised health insurance tax deductions and what people actually pay, reported RTS. The current deductions are CHF 1,700 for an adult, CHF 3,500 for a married couple and CHF 700 for a child. These are set to rise to CHF 3,000 for an adult, CHF 6,000 for a married couple and CHF 1,200 for a child. The change is forecast to cost CHF 400 million in lost tax revenue, a CHF 315 million drop in federal tax income and a CHF 85 million fall in cantonal tax revenue.

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Higher federal tax deductions for health insurance announced

Photo by Nataliya Vaitkevich on Pexels.com

The cost of Swiss health insurance has risen sharply over the years. However, the amount that can be deducted from income to calculate federal taxes has remained comparatively low. This week, Switzerland’s parliament voted in favour of closing the gap between the standardised health insurance tax deductions and what people actually pay, reported RTS.

The current deductions are CHF 1,700 for an adult, CHF 3,500 for a married couple and CHF 700 for a child. These are set to rise to CHF 3,000 for an adult, CHF 6,000 for a married couple and CHF 1,200 for a child.

The change is forecast to cost CHF 400 million in lost tax revenue, a CHF 315 million drop in federal tax income and a CHF 85 million fall in cantonal tax revenue. The government is concerned by the lost tax revenue given Switzerland’s difficult financial situation following the pandemic.

The project to boost health insurance deductions began in 2017 when Jean-Pierre Grin, a parliamentarian from the Swiss People’s Party (UDC/SVP), argued that it was needed after an explosion in the cost of the compulsory insurance charges every resident of Switzerland must pay.


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