Preventing tax debts and tax losses, that is the goal of SP National Councilor Emmanuel Amoos (42). In an initiative he therefore advocates a voluntary direct deduction of taxes from wages.
In the future, income taxes will have to be paid directly to the responsible tax office – unless the employees expressly request otherwise. As is already the case with the withholding tax for foreign employees. If you then claim deductions on your tax return, you will receive a refund.
administrative overhead
Amoos managed to win over 85 parliamentarians in advance. But now the setback: the responsible committee for economics and taxation of the National Council (WAK-N) rejects the initiative.
The introduction of a voluntary wage deduction would lead to additional administrative work for the company and for the administration, according to a press release about the decision. At the same time, a tax return would still be required for taxpayers.
Volunteering does not solve the problem
And further: The biggest problem of people with debts is their handling of money. Voluntariness would therefore not solve the problem, especially since voluntary prepayments are already possible today.
“It is not certain whether the tax losses would actually decrease after the change,” says Commission President Leo Müller (centre). Because: in the canton of St. Gallen, for example, there are currently more tax shortfalls in the withholding tax for foreign employees than in the income tax for residents. The withholding tax is paid directly by the employer.
Withholding tax is not a perfect example
In fact, the depreciation rate in the canton of St. Gallen is higher for withholding taxes at 0.7 percent (2021) than for income and wealth taxes. There it is less than 0.5 percent (2021).
If taxes are deducted directly from wages, there is no guarantee that the money will actually be transferred to the tax authorities, explains Peter Sager, head of the cantonal tax office in St. Gallen. There are always bankruptcies.
“A voluntary deduction makes no sense”
“A voluntary deduction makes no sense because those taxpayers who are not in control of their finances would reject the tax deduction,” Sager says of the proposed change. In addition, the withholding only affects income tax on wages, but not other income and property tax.
However, the 2016 report, on which Amoos’ proposal is based, came to a very different conclusion: not only tax debts, but even the entire private debt would be reduced.
Avoid nasty surprises
Somehow, “For me, the tax losses are less of a compelling argument than helping those who are struggling with the current system,” says St. Gallen National Councilor Franziska Ryser (31, Greens). She co-signed the initiative and is also a member of the Economic Commission.
You can of course pay earlier today. “But especially for younger people, for example in the first year after apprenticeship, the bill at the end of the year can be a nasty surprise,” says Ryser.
The decision in the Economics Committee was taken by 15 to 10 votes. It cannot therefore be ruled out that the proponents of a systemic change will still prevail in the National Council, which will decide next. However, it is not likely.