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Opponents warn tax hike will hit consumers

Campaigners say a plan to shore up the state-run disability insurance scheme by raising taxes will slow private consumption and put financial strain on families.

This content was published on June 25, 2009 - 17:58

A committee made up mainly of members of the rightwing Swiss People's Party said the government plan to boost the value added tax (VAT) also failed to address the structural deficit of the insurance programme.

"An increase is poison for the purchasing power of consumers," said People's Party parliamentarian and businessman Peter Spuhler on Thursday.

The committee called on voters to keep up pressure on the government to reduce the number of beneficiaries of disability insurance payments.

Voters will have the final say in September on whether to increase the VAT by 0.4 per cent for seven years. The ailing insurance scheme makes annual deficits of SFr1.4 billion ($1.3 billion) and has run up debts of SFr13 billion.

The government warned rejection of its plan would endanger the country's social security system.

The ballot was set initially set for last May. It was later changed to September 27 and implementation of the increase was put off to 2011 for political and economic reasons.

The VAT is currently 7.6 per cent, with reduced rates for the hotel industry and for essential consumer goods.

Urs Geiser, swissinfo.ch

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