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Yes to the Tax Reform and AHV Financing (TRAF)

04 Jun 2019

On 19 May 2019, the Swiss electorate passed the Federal Act on Tax Reform and AHV Financing (TRAF). The proposal combines two issues in need of reform. Below we explain the most important changes to the AHV (OASI).

The TRAF proposal emerged as a response to the “No” vote by the Swiss electorate on the Tax Proposal 17 and the pension reforms in 2017. In the immediate aftermath of the rejection of the two proposals, the Parliament and the Federal Council drafted the TRAF with a view to solving both of these pressing problems as quickly as possible. The TRAF is intended to strengthen the financial situation of the AHV (OASI) and safeguard AHV pensions.

Specifically, it envisages additional financing by employers, employees and the Confederation. Beginning as early as 2020, CHF 2 billion per year are due to flow into the AHV. CHF 800 million of this will be contributed by the Confederation. The remaining CHF 1.2 billion will be financed by increasing the AHV contribution rate paid by employers and employees by 0.15% each. The table below provides an overview of the most important changes to the contributions and contribution rates.

The reform will enter into force on 1 January 2020. It will improve the financial situation of the AHV in the short term. To stabilise funding in the long term, it will be followed in a next step by the “AHV 21”. This reform package will see the Federal Council propose additional measures to safeguard the AHV. 

Read more about the tax reform in the Report from our tax experts .

 

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