Swiss referendum set to back global minimum corporate tax, climate goals

Sunday, 18 Jun 2023 

ZURICH, June 18 — Swiss voters looked set to approve proposals to introduce a global minimum tax on businesses and a climate law that aims to cut fossil fuel use and reach zero emissions by 2050, projections by public broadcaster SRF showed today.

The projections, based on counted votes, showed 88 per cent of those who voted in today’s national referendum backed raising the country’s business tax to the 15 per cent global minimum rate from current average minimum of 11 per cent, while 55 per cent supported the climate law.

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The results of the vote were expected later today.

In 2021, Switzerland joined almost 140 countries that signed up to an Organisation for Economic Cooperation and Development (OECD) deal to set a minimum tax rate for big companies, a move aimed at limiting the practice of shifting profits to low tax countries.

Even with the increase Switzerland will still have one of the lowest corporate tax levels in the world, and the proposal, estimated to bring 2.5 billion Swiss francs ($RM12.9 billion) per year in additional revenue, has been backed by business groups, most political parties, and the general public.

The climate law, brought back in a modified form after it was rejected in 2021 as too costly, has stirred up more debate with those campaigning against it gaining traction in recent weeks.

Proponents say the law is the minimum the wealthy country needs to do to prove its commitment to fighting climate change while opponents from the right wing People’s Party say it will jeopardise energy security.

The projections from today’s referendum also suggested voter approval for an extension of some provisions of the country’s emergency Covid-19 law, required under Switzerland’s system of direct democracy, where legislation is put to the public vote.

Switzerland is home to the offices and headquarters of around 2,000 foreign companies, including Google as well as 200 Swiss multinationals, such as Nestle. While all would be affected, business groups have welcomed the greater degree of certainty that the new tax would bring, even if Switzerland lost some of its low-tax allure.

“No other country is going to have lower taxes either. We want the additional tax revenue to stay in the country, and be used to improve its attractiveness for businesses,” said Christian Frey, from Economiesuisse, a lobby group. — Reuters

Switzerland votes for new climate change law

Projections show 58.3% of voters in favour of legislation to reduce the country's dependence on imported oil and gas

Chunks of ice float in a lake in front of the Rhone Glacier near Goms, Switzerland. AP

Matthew Davies
London
Jun 18, 2023

Swiss voters have voted to pass a new climate change law on Sunday which, if passed, would see the country reduce its reliance on imported oil and gas.

Projections by the GFS Bern Institute and released by public broadcaster SRF showed that 58.3 per cent of voters approved the passing of the bill. The margin of error was plus or minus 2 percentage points, according to SRF.

“The supporters have reason to rejoice,” Urs Bieri of the GFS Bern Institute told SRF.

“But by no means everyone is in favour of the law. The argument with the costs has brought many ‘no’ votes.”

Recent opinion polls had shown widespread support for the “Federal Act on Climate Protection Targets, Innovation and Strengthening Energy Security”, as the Swiss witness the impact of global warming on the country's rapidly melting glaciers.

READ MORE
Glacier melting 'off the charts', UN agency says

In the run-up to Sunday's vote, a survey showed despite 63 per cent being prepared to vote in favour of the bill, there was nervousness over the ability of country to quickly replace imported energy with home-grown, green alternatives.

Switzerland imports 75 per cent of its energy. All of its oil and gas comes from abroad.

Climate activists had lobbied for a total block on oil and gas imports by 2050, but the government subsequently opted not to have an outright ban in the final bill.

Instead, the new law will pledge 2 billion Swiss francs ($2.2 billion) over a decade to kick-start the replacement of gas or oil heating systems with greener alternatives.

An electoral poster urging Swiss people to vote in favour of the bill in Lausanne. AFP

Opposition from the Right

The right-wing SVP party said the law would create supply problems and send household electricity bills soaring.

SVP leader Marco Chiesa said the bill would effectively be a “electricity-wasting law” driving up energy costs by 400 billion Swiss francs, and have “no impact” on the global climate

.

The Fiescher Glacier in Switzerland. AP

Meanwhile, environmentalists welcomed the triumph of the “yes” vote.

“This victory means that at last the goal of achieving net-zero emissions will be anchored in law. That gives better security for planning ahead and allows our country to take the path towards an exit from fossil fuels,” said Georg Klingler, an expert on climate and energy at Greenpeace Switzerland.

“The result of the vote shows that the citizens of our country are committed to the aim of limiting global warming to 1.5°C in order to preserve as much as possible our glaciers, our water reserves, our agriculture and our prosperity.

“I am very relieved to see that the lies disseminated by the opposite camp during the campaign did not sow the seed of doubt in people,” he added.

Back in April, the World Meteorological Organisation said the economic impact of Switzerland's melting Alpine glaciers would have a serious impact on the country's economy – from loss of tourism and the potential for natural disasters such as landslides, to the possible lowering of river levels that supply hydroelectric power plants.

Swiss glaciers lost 6 per cent of their volume last year, a figure that rang alarm bells for scientists who said a 2 per cent loss due to melting would have been considered extreme.

Between 2001 and 2022, Switzerland's glaciers lost around a third of their volume.

Switzerland holds referendum on net-zero climate law

The government plans a 75% emission cut by 2050 but the right-wing Swiss People's Party warned the plan will cause energy prices to rise

Deutsche Welle Published 18.06.23

An ad for the climate protection law referendum calls on voters to "Upset Putin with your voice"

Deutsche Welle

Swiss voters took part in referenda Sunday on a new climate protection law and higher corporate taxes, with polls indicating that both measures will pass.

Parliament already passed the climate law, which aims to make Switzerland climate neutral by 2050 and reduce the impact on the country's iconic glaciers, which are melting away at an alarming rate.

But the right-wing conservative Swiss People's Party (SVP) has refused to back it, arguing that cutting climate-damaging emissions by 75% by 2050, compared to 1990, would cause energy prices to explode.

SVP leader Marco Chiesa last month criticized the "utopian" vision behind the bill, maintaining it would drive up energy costs by 400 billion Swiss francs (€447 billion, €4.08 billion) while having basically "no impact" on the global climate.

The SVP collected sufficient signatures to force the referendum vote under Switzerland's system of direct democracy.

Alpine glaciers melting fast

Backers of the plan argue that Switzerland will be hard-hit by climate change and is already seeing the effects of rising temperatures in the Alps.

Swiss glaciers experienced record melting last year, losing more than 6% of their volume and alarming scientists who say a loss of 2% would once have been considered extreme.

Opinion polls indicate strong support for the proposed law, the most recent by pollster gfs.bern put public backing at 63%.

Subsidies for renewable heating systems

The Swiss government is keen to promote the departure from fossil fuel use in heating with financial incentives.

Companies will also be supported to help them convert to climate-friendly technologies.

Over a period of 10 years, 3.2 billion Swiss francs are available for this purpose.

Switzerland still imports about three quarters of its energy and the need to transition has been made more urgent by unstable supplies from Russia due to the Ukraine war.

In an attempt to bring down that share, the government is planning to allow companies to build large solar panel parks in the Alps, along with more wind turbines.

Climate activists had initially wanted to push for a total ban on all oil and gas consumption in Switzerland by 2050.

But the government balked at the so-called Glacier Initiative, drawing up a counter-proposal that scrapped the idea of a ban but included other elements.

Meteorologists have warned that climate change to exacerbate natural disasters in the Alps and hurt tourism revenues.

Corporate taxes to rise in line with rest of world

In the case of corporate taxes, the issue is the implementation of a decision by the Organization for Economic Cooperation and Development (OECD) to require international companies with sales of at least $750 million to be taxed at a rate of at least 15%.

Many of Switzerland's 26 cantons have imposed some of the lowest corporate tax rates in the world, in what they often said was needed to attract businesses in the face of high wages and location costs.

The government estimates that revenues from the supplementary tax would amount to between 1.0 and 2.5 billion Swiss francs in the first year alone.

Basel and Zug, where large pharmaceutical and trading groups are based, would benefit most from higher tax revenues.

The latest opinion poll indicated that 73% of voters backed the plan.

Polling stations were due to remain open until 12 p.m. local time (1000 GMT), with most voters casting their ballot in advance.

Initial results were expected by mid-afternoon.