August M
A country long defined by military restraint is preparing voters for a significant financial shift as Europe’s security landscape hardens.
Bern says the move is unavoidable if Switzerland wants to protect itself in an era shaped by war, cyber threats and long-range attacks.
According to POLITICO, Switzerland will raise its value-added tax for a decade to fund a major increase in defence spending.½
Tax rise planned
The Swiss government said it plans to temporarily increase VAT by 0.8 percentage points, from the current 8.1 percent, starting in 2028 and lasting for 10 years.
The additional revenue would be channelled into a new armament fund, which would also be allowed to borrow money. Officials estimate the defence push will require about 31 billion Swiss francs (€33 billion).
“In view of the deteriorating geopolitical situation, the Federal Council wants to substantially strengthen Switzerland’s security and defense capabilities,” the government said.
Voters have a say
The tax increase cannot take effect immediately. Raising VAT requires a constitutional amendment, meaning the proposal must go through a public consultation process expected to begin in the spring.
Swiss voters will ultimately have the final say, continuing the country’s tradition of direct democracy even on sensitive security matters.
Ukraine war catalyst
Switzerland began reassessing its defence posture after Russia launched its full-scale invasion of Ukraine nearly four years ago.
While the country maintains its neutrality and has no plans to join NATO, it has sought closer military cooperation with European partners and accelerated rearmament efforts.
The government acknowledged that its long-standing defence targets are no longer sufficient.
Armed forces under strain
Switzerland currently spends about 0.7 percent of its GDP on defence, among the lowest levels in Europe. A previous goal of reaching 1 percent by 2032 is now considered outdated.
“Due to the savings made in recent decades, the armed forces are also insufficiently equipped,” the Federal Council said, citing vulnerabilities to long-range strikes and hybrid warfare.
Planned investments include air defence systems, cybersecurity, and electromagnetic capabilities.
Sources: POLITICO
