Council of States committee rejects introduction of tonnage tax on ships
Published: Tuesday, Feb 20th 2024, 17:20
Updated At: Tuesday, Feb 20th 2024, 17:20
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Tax relief for shipping companies no longer appears to be acceptable in view of the federal government's tight financial situation. The responsible committee of the Council of States rejects the introduction of a so-called tonnage tax.
The Council of States' Committee for Economic Affairs and Taxation (WAK-S) reached this decision by 7 votes to 4 with 2 abstentions, as reported by the parliamentary services on Tuesday. Specifically, the majority requested the plenary session not to vote on the bill in the upcoming spring session.
With the introduction of tonnage tax, companies active in maritime shipping could choose to pay flat rates for loading capacity rather than profit tax for individual ships. This would make the average tax burden significantly lighter for companies than it is today.
The National Council and the Finance Committee of the Council of States (FK-S) had spoken out in favor of the tonnage tax before the federal elections. According to the proponents, this was intended to create a level playing field with other countries that already apply such a tax.
Doubts prevail
In the fall, the WAK-S had demanded more information from the administration about the financial consequences of the new tax. The majority of members are apparently not convinced by this.
According to the press release, doubts about the bill prevailed. In view of the federal government's strained financial situation and unresolved issues, the proposal should be rejected. The risk of a loss of revenue is too high in the current situation.
In addition, the question of the constitutionality of the project remains controversial. Finally, according to its own statements, the Commission does not want to reduce taxes for a single sector; rather, the issue of tonnage taxation should be embedded in an overall tax strategy.
Parliament's mandate
The left-wing green party has long criticized the planned move as an "industry-specific tax subsidy" and threatened a referendum. Finance Minister Karin Keller-Sutter also urged restraint in last weekend's SRF "Samstagsrundschau": in view of the ailing federal finances, tax breaks are not appropriate at the moment.
The proposal for the tonnage tax is based on a parliamentary mandate from 2016. More than twenty EU countries already have this option. According to the proponents, the proposal offers opportunities in terms of tax policy, as the establishment of additional companies, activities and new jobs could lead to additional revenue.
According to research by the investigative magazine "Reflekt", the Geneva-based Mediterranean Shipping Company (MSC) was involved in drafting the law. The group would benefit greatly from the tonnage tax.
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