Receipts of CHF 73.51 billion (2018)
VAT and direct federal tax and the Confederation’s main sources of receipts, and currently bring in a total of CHF 45 billion. Direct federal tax is raised on private individuals’ income (progressively, maximum 11.5%), and on business profit (8.5%). VAT is 7.7% on most goods and services. The Federal Constitution sets out which taxes the Confederation is permitted to raise.
Expenditure of CHF 70.57 billion (2018)
Almost a third of federal expenditure – CHF 22 billion – go towards social welfare. Half of that goes towards old age pension provision (OASI), and a sixth to invalidity insurance (II). Other major areas of expenditure are health insurance (premium reductions), migration and OASI supplementary benefits. Social welfare is one of the fastest growing areas of federal expenditure.
The Constitution requires the Confederation to balance its expenditure and receipts on a lasting basis. It is required to run a surplus when the economy is strong, and may spend more than it collects in receipts when the economy is weak. This ‘debt brake’ was applied for the first time in 2003. Since then, federal debt has been reduced by a quarter, from CHF 124 billion to CHF 99 billion. In this respect, Switzerland does well compared to other countries: the national debt is around 28% of gross domestic product (GDP).