Swiss cantons, cities and municipalities expect a significant decline in tax revenues for 2020 and 2021. This is the result of a study conducted in March and April by the auditing and consulting firm PwC Switzerland in collaboration with the Union of Cities Swiss.
According to the study, the pandemic will have a significant impact on the balance sheet of 2021. The losses in tax revenues of companies (-23% for cantons, -16.6% for cities) are more pronounced than those of private individuals (-1 , 1% for the cantons, -1.6% for the cities). For the authors, this is likely due to the fact that companies are more exposed to the financial risks of Covid-19 than individuals. The latter, for example, receive an allowance for part-time work or, in the event of dismissal, are entitled to unemployment insurance or social assistance.
From 2022, tax revenues are expected to rise again and the situation should return to normal. The majority of study participants do not believe that tax increases are an appropriate means of countering the tax losses caused by the pandemic.
Debt should show strong growth for the years 2019 to 2023 (cantons with + 36%, cities with + 72%). In the cantons the increase will be sharp while in the cities and municipalities it will be more constant. In the cantons, however, the debt will decrease more rapidly. “This indicates that the cantons consider their role to be to provide emergency or one-off distress aid,” said Roland Schegg, co-author of the study and director of PwC Switzerland. Cities and municipalities will instead have to deal with the long-term effects of Covid-19 and this will weigh on their budgets for several years.
06 June 2021, 10:08
Last modified on:
06 June 2021, 10:20