Global Daily Tax News, Second VAT Hike Proposal Floated In Switzerland, (Dec 9, 2025)

The Swiss Government is reportedly considering a 0.5 percentage point increase to the headline value-added tax rate, to boost funding for the army.

The proposal from the nation's Defence Minister, reported by local newspaper Tages-Anzeiger, would be effective as early as January 1, 2026.

However, the Government has so far failed to secure approval for a different, earlier proposed hike to the nation's VAT rates from January 1, 2026, to secure funding for reform of Switzerland's pensions system. Under these plans, the headline rate would rise by 0.7 percentage points to 8.8 percent. Further, the 3.8-percent reduced rate of VAT on accommodation would rise to 4.2 percent, and the 2.6-percent reduced rate on essential consumer goods would rise from 2.6 percent to 2.8 percent.

These value-added tax hikes were narrowly supported by the National Council's Social Security and Public Health Committee (CSSS-N) in September 2025. However, despite a January 1, 2026, implementation timetable, lawmakers have yet to approve the necessary legislation.