The Centre, the PLR, the MCG, the UDC and economic circles unite against a new tax hike in Geneva. They are fighting a tax initiative of the far left submitted for a vote on March 12 and which wants to tax all dividends from large shareholders. They fear a loss of fiscal attractiveness for the canton.
In Geneva, economic circles, the Centre, the PLR, the MCG and the UDC are up against a tax initiative by the far left. They presented their arguments to the press on Tuesday in view of the popular vote of March 12, 2023 on initiative 179. Against the virus of inequalities… Let’s resist! Remove the tax privileges of large shareholders. The text wants to tax at 100% the dividends of shareholders who own at least 10% of the shares of a company. According to Résistons!, authors of the initiative, the measure, which would affect approximately 1,600 Geneva taxpayers, should bring in an additional 120 million francs per year to public authorities.
The text would represent a risk for the attractiveness of Geneva according to the opponents. The canton is the champion of all categories in the tax field according to the Federal Finance Administration. Currently, the cantonal tax for shareholders of more than 10% is set at 70%. As Alexandre de Senarclens, PLR deputy, reminds us “ [Genève] it is the canton which exhausts and which exploits the most its fiscal potential. Geneva unfortunately lives up to its reputation as the most “voracious” canton in Switzerland and drains nearly 34% of its potential resources”. In addition, the initiative would completely miss its target by attacking SMEs according to Vincent Subilia, director general of the Geneva Chamber of Commerce, Industry and Services (CCIG).
The initiative was rejected without a counter-project by the majority of the Grand Council. According to opponents, the current situation which provides for reduced taxation of dividends makes it possible to avoid penalizing companies, in particular SMEs, from the effects of excessive economic double taxation. Indeed, the Swiss tax system allows the mitigation of economic double taxation from a threshold of ownership of a company of 10%. However, it is unlikely that a single person owns 10% of a listed company as explained by Michael Andersen, tax expert and member of the UDC.
Michael Andersen also highlighted the fragility of the Geneva tax pyramid where 4.2% of taxpayers pay more than 50% of income tax. According to the Geneva tax authorities, more than 30,000 taxes on dividends are imposed at 100%, and in some 1,500 other cases, i.e. more than 10%, the rate is reduced. Thus, the vast majority of people who receive dividends are already taxed at 100%. Proof that only SMEs would be affected according to the right.
Director of the Harsch company that she inherited from her father, Isabelle Harsch did not hide her concern about a possible acceptance of the initiative by the people of Geneva. Far from wanting to exempt itself from taxes, it wants reasonable taxation to allow companies to develop.
In addition to this text, another tax initiative will also be submitted to the population in June 2023. This is initiative 185 Pfor a temporary solidarity contribution on large fortunes launched by the Geneva left. It offers to subject taxable fortunes of more than 3 million francs to a solidarity contribution of 2.5 per thousand on the part of the fortune exceeding 3 million francs, and this for ten years. This measure would bring 350 million francs to the canton and 85 million francs to the Geneva municipalities according to the left. The right opposes it.