Left-wing political parties and trade unions have gathered enough public support to forge ahead with a challenge to the proposed partial abolition of tax on financial transactions.

A referendum with 70,000 votes was handed in to the authorities on Tuesday, which could trigger a nationwide vote on the issue.

In May the Swiss parliament decided to abolish capital duty on certain equity transactions, such as the issuance of shares for a capital increase.

Opponents argue that the reform would only benefit larger companies rather than small and medium-sized enterprises (SMEs).

Although the government calculates a CHF250 million ($270 million) tax shortfall from the reform, opponents fear that this is the first step in a series of tax reductions on financial services by banks and insurance companies which would cost a total of CHF2.2 billion – money needed to fight climate change.

The Swiss financial centre has lobbied for many years for an abolition of so-called stamp duties, which they argue make Switzerland less competitive than other jurisdictions.

A date for a nationwide vote will be set once the authorities have validated the signatures and the government and parliament discuss the challenge.

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