Tax breaks harm the climate according to study

Published: Monday, Dec 2nd 2024, 09:30

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The abolition of all tax concessions with a climate impact can reduce carbon dioxide (CO2) emissions by 2.5 million tons per year. These are the findings of a study by the Swiss Federal Institute of Technology Lausanne (EPFL) and the University of Lausanne.

This corresponds to almost six percent of national greenhouse gas emissions, the EPFL announced on Monday. This would generate tax revenue of CHF 4.6 billion, of which the largest share - CHF 2.9 billion - would benefit the federal government. The study examined tax concessions at federal, cantonal and municipal level.

International air traffic, which is exempt from mineral oil tax and VAT, benefits from a highly climate-relevant subsidy. Abolishing these tax concessions would reduce CO2 emissions by almost 1.5 million tons per year, the report continued. There is also the potential for over 1.3 billion Swiss francs in additional tax revenue.

Tax concessions for company cars, free parking spaces and commuter deductions have a detrimental effect on the climate in commuter traffic. Tax concessions influence the behavior of users, wrote the EPFL.

Abolishing the commuter deduction and tax breaks for company cars and parking spaces at the place of work would reduce CO2 emissions by over 600,000 tons and generate additional income tax revenue of over two billion francs.

In the case of heavy goods vehicles, the external costs of the performance-related heavy vehicle charge are not compensated. Light commercial vehicles are completely exempt from it. If heavy goods traffic and light commercial vehicles had to cover their non-climate-related external costs in full, CO2 emissions would fall by over 200,000 tons and generate more than one billion Swiss francs.

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