Due to the federal structure of the state, the cantons and communes levy taxes in addition to the federal government. As a result, taxpayers pay different amounts of tax depending on where they live and are thus exposed to a different tax burden.
A low tax burden contributes to the attractiveness of a location and is therefore desirable from an economic perspective. However, the quality of a location depends on many factors, including the legal framework, social peace and the qualifications of potential workers. No direct conclusions about the financial situation of private households can be drawn from the fiscal ratio. For this, the tax burden would have to be related to the benefits that citizens receive from the state.
The tax burden varies from canton to canton: the lowest values of the tax utilisation index in the reference year 2021 are recorded in the central Swiss cantons of Zug, Schwyz and Nidwalden, with Zug having the smallest index value. The highest value is recorded in the canton of Geneva, followed by Neuchâtel and Vaud.
The fiscal share refers to a nomenclature developed by the OECD and includes taxes and compulsory social security contributions according to the definitions of overall economic accounting. In Switzerland the fiscal share includes federal, cantonal and local taxes, income from the monopoly on alcohol, cantonal royalties and licences, contributions towards the OASI/II/LII, the SAIF, unemployment insurance, and towards family benefits for the agricultural sector. Health insurance premiums are also included, although this is not strictly compulsory according to the nomenclature used by the OECD.
The tax utilisation index is a reflection of the total tax burden in a canton. It provides information on the total fiscal burden on the resource potential and thus shows the extent to which the tax-exploitable value added (income, profits and capital gains) of taxpayers (natural persons and legal entities) is effectively burdened by cantonal and municipal taxes and is thus no longer available for private use.
State and Politics, Public finance, Revenue and taxation
November 26, 2010
March 9, 2022
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