The Council of States shows its heart for people with debts: taxes will soon also be part of the subsistence minimum

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Taxes must be included in the calculation of the subsistence minimum. The Council of States decided this without voting against. The Geneva SP politician Carlo Sommaruga spoke of a paradigm shift. In fact, the decision has far-reaching consequences – although the National Council still has to approve the proposal.

If someone is so deeply in debt that it is seized, they are only allowed to keep the money for essentials. For example for rent or health insurance – the so-called Level of existence . Taxes are not yet included. The result: the seized persons cannot pay current taxes and therefore inevitably incur new debts to the tax authorities. Without making mistakes. You step in Debt spiral and often have little chance of getting back on their feet.

One person earns 5,000 francs. Because her income is being seized, she is only allowed to keep the subsistence minimum of R2,200 to pay for her basic daily needs, rent and health insurance. The collection agency collects the remaining 2,800 francs.

Tax is also due on the 5,000 francs of income, let’s say 200 francs per month. But how is the person supposed to pay for it if he can only keep the amount for basic needs, rent and health insurance? At the end of the year, the tax debts of 200 francs had increased twelve times, amounting to 2,400 francs.

She has been trying to solve the problem for years. However, so far all attempts have failed – for various reasons. But now a solution is in sight. The Federal Council said in autumn 2023 that it would make concrete proposals for implementation if Parliament gave it a clear political mandate. The Council of States has now done that.

The proposal will next go to the National Council, which is expected to discuss it during the 2024 summer session. If the parties stick to what they told the observer at the judicial audit, the National Council must also approve the proposal.

The collection agency calculates this individually. It bases this on the guidelines of the Conference of Collection and Bankruptcy Officers. This includes the following positions:

• Basic amount of 1,200 francs for singles and 1,700 for couples – for food and clothing
• Rental price includes additional costs and heating costs
• compulsory insurance, such as compulsory health insurance
• Professional expenses, meals away from home and travel expenses to work
• Support and maintenance contributions
• School costs for children
• Costs for doctors, dentists and medicines

There is nothing specific about this in the law. But the Federal Court has already ruled several times that taxes do not count towards the subsistence minimum. The reason: you can live even if you don’t pay taxes; it is not an essential expense. That is why it is also stated in the guidelines of the collection agencies.

• Firstly – as mentioned – because you don’t starve if you don’t pay taxes. Existence is not in danger.
• Secondly, they did not want to give tax authorities priority over other creditors. Because if debts to the tax authorities were included in the subsistence level, the money would be reserved exclusively for the state.
• Thirdly, it is difficult to check whether the debtor actually transfers the blocked money to the tax authorities – and does not spend it on something else. For example, for health insurance premiums, you must show the paid invoice to the tax authorities every month. But taxes are usually not paid monthly, but once a year. The Federal Council should provide a solution to this problem in its implementation proposal.

For those in debt, this prolongs a situation that is itself a major burden. Because if your wages are seized, you have to limit yourself enormously: everything that is a bit fun will not go ahead, such as holidays, sports or excursions. Once the debts are finally paid off, things continue straight away. Then the tax authorities demand the current taxes, the next wage garnishment begins, and the money tap is closed again. That’s how it goes year after year.

Many of those affected cannot get out of this vortex, become ill and give up. The consequences are also negative for the state. Not only does he lack tax income, but in the worst case he has to financially support those affected if they become ill and can no longer work.

Source:Blick