The Zurich Cantonal Council has approved a reduction in the corporate tax rate from 7% to 6%, a decision that has caused controversy and sparked debate.
The tax cut is part of a larger strategy to attract businesses to the canton and has faced opposition from major cities within the region. The decision will be put to a public referendum in May 2025, as left-wing parties plan to challenge it.
Supporters argue that the tax cut will create jobs and stimulate economic growth.
They believe that by reducing the corporate tax rate, businesses will be incentivized to invest in the canton, leading to increased employment opportunities and overall economic prosperity.
Critics express concerns about the impact on public services and infrastructure.
They worry that the reduction in corporate tax revenue may lead to cuts in essential services and a decline in the quality of public infrastructure.
The financial implications of the tax cut are a key point of contention, with estimates of revenue losses ranging from CHF 70 million to potentially hundreds of millions.
The proposal to increase taxation on dividends as a counter-financing measure has been abandoned, raising concerns about potential austerity measures.
The cities of Zurich and Winterthur, which heavily rely on corporate tax revenues, are worried about the impact on essential services.
They fear that the reduction in tax revenue may lead to budget cuts, affecting the provision of necessary services to their residents.
The upcoming referendum will be a test of public sentiment on corporate taxation and economic policy in the canton.
Both sides are preparing for a contentious campaign, with the left emphasizing the potential negative impacts and proponents focusing on the promise of economic growth and job security.
The outcome of the referendum could have significant implications for the canton's fiscal policy and its attractiveness to businesses.
The Zurich tax debate highlights the challenge of balancing competitive tax rates with adequate public funding.