Faced with the deterioration of the geopolitical situation, the Federal Council wants to strengthen Switzerland’s defense capacity. From 2028, he intends to devote some 31 billion francs to it. The government wants to compensate for these additional expenses with an increase in value added tax (VAT) of 0.8 percentage points, limited to ten years.
The revenue must feed a fund that can go into debt. This fund must finance arms expenditure and provide sufficient financial resources for federal civil offices important for security. The people and the cantons will have the last word, because an increase in VAT requires a modification of the Constitution. The vote is scheduled for the summer of 2027.
The Center convinced, “yes but” of the PLR
Only Le Centre, the party of Defense Minister Martin Pfister, supports the project without reservation. According to him, security is a public good that benefits all the country’s inhabitants. This justifies that all households participate jointly in financing security, he writes.
Furthermore, the VAT increase can be implemented in a socially acceptable way. Indeed, both health insurance premiums and rents would be completely exempt from VAT. Finally, it is right that the people can express themselves on this subject.
The PLR shares the opinion of the Federal Council according to which the situation in terms of security policy has deteriorated. A credible defense capability is “of elementary importance for the protection of the population and the sovereignty of our country”, indicates the PLR.
The creation of a fund for army expenses is therefore a good idea. But he categorically refuses that this be fueled by an increase in VAT. The Confederation must not once again burden the middle class with additional tax burdens.
Déséquilibré
The Vert’Liberaux also recognize “the need to act in terms of security policy”. However, they believe that the additional means desired by the Federal Council are not sufficiently justified. They also judge that the financing proposed, solely through VAT, is “unbalanced”. In their eyes, such a project has “no chance of gathering a majority”.
The PVL advocates for a high defense capacity at lower cost through a concentration of key capabilities, a realistic size of the army and more international cooperation. The additional financial needs of around three billion francs per year indicated by the Federal Council must be reduced by a third.
Too expensive according to the PS and the Greens
On the left, the Greens are opposed in principle to an increase in the army budget. Spending even more money on armaments would be “a mistake and an anti-social measure.”
This budget has already been gradually increased in recent years, going from around five billion francs (2021) to just over 6 billion, environmentalists criticize. In 2032, the army should have around 9 billion francs. “Ultimately, the army’s annual budget would be almost twice as high as at the start of the decade,” continue the Greens.
For the PS, increasing the army budget well beyond 1% of GDP is “not fundamentally justified”. He opposes the increase in VAT to finance this project. The Federal Council should examine other options. Above all, the army needs reforms in planning work and a consistent orientation towards improving efficiency. The PS does not reject the principle of the fund, but it is opposed to its planned form.
The UDC wants to draw elsewhere
On Saturday, the UDC had not yet submitted an official position. But the party had already made it known at the end of January that it was opposed to the increase in VAT for defense.
Switzerland has enough money to finance this increase in other ways, for example by correcting “asylum chaos”. The Conservative Party is also wary of these limited tax increases which end up becoming unlimited.
The Governmental Conference of Military Affairs, Civil Protection and Firefighters (CG MPS) supports in principle the Federal Council’s proposal. Given the uncertainty surrounding the project, the cantons are urging that financing variants be prepared in parallel.
