Column by Stefan Meyerhans: Higher VAT = higher prices?

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You may have already noticed that the regular VAT rate has increased from 7.7% to 8.1%. Will everything taxed at the new regular rate become more expensive?

No, it shouldn’t be this way: after all, if you are now buying foreign products, for example, new clothes, a vacuum cleaner, personal hygiene products or a bicycle, then the price should at least remain the same.

Why? Because industrial tariffs were eliminated at the beginning of 2024, with some exceptions. Usually they averaged 1.8% of the cost of the goods. Even for goods from countries that are already duty free, the administrative effort and therefore the costs are now reduced.

For Swiss retailers, this means lower import costs that they have to pass on to customers, and in the face of competition! This contrasts with a 0.4% increase in VAT (regular rate). In some cases, there is even the possibility of price reductions.

In short: Foreign goods should not become more expensive, despite the VAT increase, and some should even become cheaper.

A few more words about “what is good for one person is cheap for another”: industrial tariffs were abolished, not least at the insistence of Swiss companies, which were particularly irritated by the costs and administrative efforts.

The same thing irritates consumers when they make purchases abroad above the tax-free limit of 300 francs. But unlike companies, there are attempts to lower the no-cost limit even further. As a result, bureaucracy continues to grow and people have to pay more. I think this is not right and not cheap.

What do you think?

PS Public hearings are currently underway. You can participate until mid-March 2024. An email to Zollveranlagung@bazg.admin.ch is sufficient.

Source: Blick