Package causes controversy Swiss to pay more taxes - explosive Federal Council plan leaked
Defense Minister Martin Pfister is planning to break a fiscal taboo: because the security situation in Europe is becoming increasingly tense, he wants to rearm the army more quickly - financed by higher value-added tax. The Federal Council could discuss the proposal before Christmas.
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- Defense Minister Pfister is considering an increase in VAT in order to raise billions for additional armaments.
- The plan is based on scenarios according to which Russia could pose a greater threat to Europe from 2028.
- The first additional purchases for air defense could be due as early as 2026 and 2027 - despite strict procurement rules and supply bottlenecks.
The security policy situation in Europe also concerns Switzerland. At a Federal Council meeting, Defence Minister Martin Pfister came to the conclusion that the army's current modernization plans are not sufficient. His department says that action needs to be taken more quickly - and more money made available for this.
Pfister's proposal: increase VAT by around half a percentage point, as the Tamedia newspapers reported on Friday. This would raise around 1.75 billion francs a year. However, this step would require an amendment to the constitution. The process would go through parliament and a referendum, which is why additional money could only flow from 2028 at the earliest.
As the debt brake is to remain untouched, the government is looking for alternatives to create short-term room for maneuver as early as 2026 and 2027. The rising costs of the army and the 13th AHV pension are further exacerbating the situation. Finance Minister Karin Keller-Sutter is now said to be more open to new solutions.
Baume-Schneider also wants to increase VAT
At the same time, Pfister's experts have drawn up a rearmament package based on threat scenarios from 2028. The focus is on air defense. Switzerland wants to procure additional systems quickly - for long, medium and short ranges. Patriot and Iris-T units have already been ordered; other variants such as SAMP/T or the Skyranger system produced in Zurich are under discussion. Defence technologies against drones are also to be prioritized.
Procurements outside of the regular procedures - such as direct awards - would be faster, but politically sensitive. At the same time, the Federal Council still has to decide how to deal with the higher costs of the 36 F-35 jets ordered. Additional fighter jets are also an option.
The timing of the proposal to increase VAT is controversial: The financing of the 13th AHV pension is also on the agenda - Interior Minister Elisabeth Baume-Schneider is also calling for higher VAT for this. This means that two of the most expensive dossiers in the Federal Parliament are competing with each other.
One thing is clear: the security policy decisions of the coming weeks will be far-reaching. For Pfister, the need for action is undisputed - now it is up to the Federal Council to determine the course.
