Country Report on Tax Expenditures in Switzerland: Transparency, Costs and the Need for Reform

Tax expenditures – deductions, reduced rates and other preferential tax provisions – are a well-established instrument of fiscal policy. They serve a wide range of purposes: stimulating investment, supporting social objectives and accompanying structural change are just a few examples. In Switzerland, the last estimate for federal tax expenditures puts them at CHF 25 billion per year.

Unlike regular government spending, which Parliament reviews year after year, tax expenditures are often embedded in tax law for years on end, without ever being systematically scrutinized. Their costs grow quietly, and they are rarely reviewed. Reliable figures are frequently lacking.

This also holds true for Switzerland. The country ranks in the bottom quartile worldwide on the Global Tax Expenditures Transparency Index, with 37 out of 100 points. The last comprehensive report on federal tax expenditures was published in 2011. The resulting data gaps undermine not only transparency and accountability, but also the debate on reform.
transparency.