Tax and OASI proposal | GFS Bern

Tax and OASI proposal: giving the official position the benefit of the doubt

18.06.2019 | Lukas Golder

The tax and OASI package combines two unrelated proposals; some consider this approach to be undemocratic. But a majority prioritised the urgent need for reform. The two main arguments in favour of the proposal revolved around securing the attractiveness of Switzerland as a business location and ensuring pension security.

On 19 May, voters decided on STAF, the federal law on tax reform and OASI funding. The sharp divisions between and within the parties led to a sense of disorientation among the general public during the campaigning period, but the opponents of the proposal failed to put forward convincing arguments.

The resistance movement lacks enthusiasm and an organised campaign. Its shortcomings were reflected in the opinion-forming process during the campaign.

In cases where uncertainty prevails, the public tends to vote with the official position, choosing moderate progress and a restrained adjustment of Swiss laws to their international equivalents. Despite initial concerns, the tax and OASI proposal was no exception to this rule.

What is STAF about?

STAF revolves two key issues:

1.) A reform of the corporate taxation system. The main intention behind this proposal is to ensure Switzerland’s competitive position and compliance in an international context. Foreign pressure is the main driving force behind it.

2.) An annual subsidy of around CHF 2 billion for the OASI from 2020 onwards.

The two issues are not directly related, which has prompted the media to dub the proposal a horse trade.

Why did the referendum cover both the tax reform and the OASI reform?

The OASI/tax deal is the result of two failed projects. In February 2017, voters rejected the third corporate tax reform with a majority of 59% against. The proposed pension reform suffered a similar fate in September 2017, when 53% of voters rejected it in a referendum.

What are the proponents’ arguments?

  • Pension security would improve for everyone.
  • The reform would prevent an exodus of companies and concurrent loss of jobs.
  • Switzerland would avoid being black-listed as a tax haven by the EU.

What are the opponents’ arguments?

  • Offering tax privileges to companies would cause a tax deficit.
  • The reform would prevent a structural reform of the pension system.
  • Combining two unrelated topics is considered «undemocratic».