Fri, Feb 9th 2024
Aargau’s tax cut for companies proves fruitful, attracting business expansion and yielding an additional CHF 7.6 million in tax revenue in 2022.
The Aargau tax reduction strategy has resulted in a significant boost in tax revenue, according to the cantonal government’s analysis. By lowering profit taxes for large companies, Aargau has seen a net increase in tax income, with three major companies alone contributing an extra CHF 7.6 million in 2022.
Following the public’s endorsement of reduced profit taxes for sizable enterprises in May 2022, the tax law was applied retroactively at the start of the year. This adjustment brought the total tax burden for legal entities earning CHF 250,000 or more annually down from 18.6% to 15.1%. The phased reduction positions Aargau competitively within Switzerland.
The cantonal government and parliament anticipated that the tax cut would lead to dynamic effects, making Aargau more appealing to businesses and thus increasing tax revenue. This theory has proven correct, with 2022’s tax income surpassing expectations.
An analysis by the cantonal finance department highlighted that three prominent companies paid an additional CHF 7.6 million in profit taxes. One of these, with operations across multiple cantons, attributed an increased profit share to Aargau, resulting in an extra six million francs in taxes, citing the attractive lower rates. Another, in the finance and management sector, expanded its Aargau workforce due to the tax cut, contributing an additional CHF 1.5 million in taxes. A third “tax-sensitive” company also expanded in Aargau, adding 100,000 francs to the tax revenue.
This strategy not only demonstrates Aargau’s attractive business environment but also underscores the effectiveness of dynamic tax policies in stimulating economic growth and enhancing state revenue.
©Keystone/SDA
A slaughter house in Aargau closed down effective immediately as of this week.
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