The Swiss government is proposing a 0.7% VAT increase in 2026 to fund a 13th monthly pension payment. The current VAT rate of 8.1% will rise to 8.8%. This is expected to generate CHF 4.2 billion annually. The increase follows a national referendum vote to raise state pensions. The government had initially proposed a 0.4% VAT hike, but has now confirmed a 0.7% rise. The VAT increase alone is expected to be sufficient to meet the pension shortfall.
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