VAT increase to fund 13th AHV pension, vote set for 29 November

On Tuesday, the left, the Centre and the Evangelical People's Party defended the VAT increase intended to finance the 13th AHV pension, after the Federal Council had done the same the previous week. Voters will decide on 29 November, just days before the first payments of the new pension.

Parliament decided to raise VAT by 0.4 percentage points to cover the cost of the 13th pension, approved by the population in 2024. The increase will not apply to basic necessities, a choice meant to spare lower incomes.

In a statement, the alliance backing the project argued that solid financing is needed to guarantee the stability of the AHV and the security of pensions. A "no" in the vote, it warned, would put the insurance scheme and those who depend on it at risk.

Vaud Green parliamentarian Léonore Porchet quantified the impact for taxpayers: "Una persona con un reddito medio pagherà circa 85 franchi di IVA in più all'anno e riceverà, in cambio, una rendita supplementare di circa 2'000 franchi all'anno all'età della pensione. Ne vale la pena" (roughly: a person with an average income will pay about 85 francs more in VAT per year and will receive in return an additional pension of about 2,000 francs a year at retirement age; it is worth it).

A partial solution

Centre party president Philipp Matthias Bregy struck a more cautious tone. He acknowledged that the project does not cover the AHV's entire financing needs and that the AHV 2030 reform will have to bring further solutions. For that reason, he added, "è importante non aggravare ulteriormente le sfide esistenti" (it is important not to further aggravate the existing challenges).

Bregy's words point to the limits of the project on the ballot: the VAT increase covers the already-approved 13th pension, not the AHV's structural deficit, which will have to be addressed by the next reform. How much a broader solution will ultimately cost taxpayers and businesses remains an open question.

The pro camp, which brings together the left, the Centre and the Evangelical People's Party, now aims to counter the positions of the FDP and the SVP, which oppose the project. Whether the VAT increase turns out to be a closed chapter or the first of several steps remains to be seen, since the AHV 2030 reform will in any case still have to tackle the rest of the financing need.