Switzerland has collected so much tax revenue over the past decade that it now has a surplus it doesn’t know how to spend.
Switzerland is renowned for its appeal to wealthy individuals, offering not just banking secrecy but also relatively low taxes.
Despite this, some regions have amassed substantial revenue surpluses after fulfilling their financial obligations. Now, the authorities have decided what to do with all this money overflowing the public coffers: return it to the citizens.
An unprecedented decision: to return the surplus. One of these regions is the canton, or state of Basel-Stadt, which includes the city of Basel. For 10 consecutive years, the canton has ended its financial year with a surplus, even after covering the region’s needs.
As France 3 reports, the Grand Council of Basel-Stadt, which is equivalent to a regional parliament, has now requested a law allowing for the redistribution of surplus tax revenue collected between 2012 and 2022, according to an English translation provided by Google.
An unexpected bonus. The canton’s surplus totals nearly 1.2 billion Swiss francs (about $1.35 billion), including 464 million Swiss francs (approximately $524 million) from the 2023 fiscal year alone. Authorities plan to return around 80% of this sum to residents while using the remaining 20% to reduce public debt.
Initial estimates suggest that eligible taxpayers will receive about 2,500 Swiss francs (roughly $2,800) annually over the next 10 years. Only individual taxpayers will benefit, as this refund system will exclude companies.
Financial stability amid prosperity. Basel-Stadt, home to around 197,000 residents, is one of Switzerland’s most fiscally stable regions. Surpluses have persisted even after the canton has paid off debts, upgraded infrastructure, and invested in education. Despite the continued surpluses, officials proposed a referendum to reduce taxes by 112 million Swiss francs (about $126 million).
However, with budget surpluses persisting, the Grand Council has approved a new tax rebate of 160 million Swiss francs (approximately $168 million), effective Jan. 1, 2025. “Anyone who can read a number with eight zeros knows that Basel-Stadt receives too much money,” Basel Grand Councillor Lorenz Amient told L’Est Républicain.
Criticism of the plan. Although the council’s decision has broad support, some dissenters argue that excluding businesses from the refunds is unfair, given their contributions to the tax surplus.
Others contend the funds should be directed toward public initiatives, such as environmental protection, health programs, or cultural development, rather than being refunded directly to residents.
Image | Thiago de Andrade (Unsplash)
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