Referendum Results; Swiss Taxes Adjusted For Inflation; Bite Health Care Premiums Set To Rise

News For 27 September 2022

On Sunday, Swiss voters considered a variety of referendum initiatives.  The government's pension reform plan initiative passed with a margin of 50.57%.  Most notably, this will raise the official retirement age of women forestalling their state funded pension eligibility until age 65, in parity with mens' retirement age.  Also passing with 55% of the "yes" votes was an initiative to raise the Value Added Tax, proceeds from which are meant to improve the finances of the public pension system.  Rejected were two initiatives to increase restrictions on factory farming and changes to the withholding and stamp taxes affecting bond investments.

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Starting in 2023, the federal government of Switzerland has increased tax deductions to compensate for the higher inflation rates experienced by taxpayers.  So-called "standard" deductions on income by both individuals and married couples filing tax forms will increase, exempting larger portions of income from tax.  The deductions for child dependents in households will also increase to compensate for the associated increased costs attributable to inflation.  And finally, deductible commuting expenses associated with travel between home and work will increase as well, presumably to compensate for the increased costs of energy.  Changes to federal tax deductions in Switzerland have not been made since 2012.

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In just a few months, new premiums on Switzerland's compulsory health insurance are set to go into effect - average premiums are expected to rise by 10%.  Unlike inflation in the cost of other consumer goods as of late, it seems the bulk of the costs are largely attributable to the costs insurers had to bear during the last 2 years of the Coronavirus pandemic.  In addition, the cost of healthcare for the aging population in Switzerland continues to put wind in the sails of higher premiums.  The expected rise in premium prices has not gone unnoticed, and the federal government has now proposed a package of measures intended to control rising health insurance costs.