No need for temporary increase in tax threshold at present

As part of the Finanzen 2019 package to enable the canton’s books to be balanced by the end of that year, a one or two-year temporary increase in the tax threshold from 82 per cent to 86 per cent had been mooted. However, thanks to unexpectedly high revenues from taxes, it seems this increase will not be necessary, at present anyway

Had the increase been implemented for one year, it would have meant additional income of CHF 32 million and double that if it had been implemented for two years. Now, Heinz Tännler, the cantonal director of finance (photograph), has announced that, under the current economic climate, a temporary increase could not be justified.

Indeed, he confirmed an unexpected CHF 70 million had flowed in the canton’s coffers so far this year. This was made up of an additional CHF 30 million from income from tax, plus a further CHF 30 million from other unspecified sources, and an additional CHF 10 million from elsewhere. What is more, this additional CHF 70 million is expected to flow in future years, too, all as a result of the booming economy. and not just in Zug.
“Of course,” as Tännler continued, “things can change, so I cannot definitely rule out any tax threshold in the future; it may have to be implemented at a later date.”

CHF 180 million is needed for the canton to be able to break even. The cantonal government was able to make a number of cutbacks for which no parliamentary approval was necessary between 2015-2018, leading to savings of CHF 50 million. However, plans to save a further CHF 40 million were rejected in a referendum in 2016, possibly because it was felt one sector of society was more adversely affected than others. Further cutbacks were able to be made in 2018, allowing another CHF 13 million to be saved.