Following a vote in the Grand Council, officials in Geneva have moved to cut taxes for higher and middle-income earners in the city. The cut, estimated to be the largest in the canton’s history, follows the news that Geneva reported a record-breaking budget surplus last year.

Geneva Grand Council approves income tax cuts

At a vote on May 3, lawmakers in the Geneva Grand Council voted in favour of cutting cantonal income tax. The plan, submitted and approved by the executive branch of the Genevan government (Council of State), would see tax rates decrease by an average of 8,7 percent for residents of the canton.

Those on the highest salaries will see their tax rates cut by 5,3 percent, while those who pay the median amount of tax will see their bills fall by an average of 11,3 percent. The whole plan is expected to cost the canton and local councils 434 million francs a year.

Cuts to taxes are affordable, argue supporters

Speaking to reporters, Centre Party Grand Councillor Sébastien Desfayes argued that the cut is affordable, with the canton recently reporting a net budget surplus of 1,4 billion francs a year. He claimed that the bill is “fair, balanced and dynamic. It strengthens purchasing power through a reduction of income taxes and provides a breath of fresh air to the middle class who do not receive state aid.”

He added that "since 1999, all the tax cuts in the canton have resulted in an increase in tax revenue”, and that despite the cuts, Geneva will still have some of the highest tax rates in all of Switzerland. With the law now approved by both chambers of government, the cut will be put to a referendum in the coming months. If it is approved, the tax cut will be in place from 2025.

Free public transport plan scuppered by FDP

While it achieved a majority among Genevan lawmakers, the tax cut plan was opposed by the official opposition, which claimed that the policy amounts to a "gift" to the wealthiest in society and that while cantonal coffers are healthy, the cut would hit local council budgets hard. They also argued that the budget surplus should instead be used to help those hit hardest by the cost of living crisis.

Indeed, the tax cut comes as original plans to spend the surplus on giving young people free public transport in the city were scuppered at a vote on the same day. According to RTS, lawmakers from FDP. The Liberals deliberately voted in favour of an amendment to the law put forward by the Social Democratic Party - a nominal change that was originally set to be rejected.

With the motion now part of the law, the Swiss People’s Party and the Geneva Citizens’ Movement withdrew their support, meaning the whole project was rejected. According to RTS, though this attempt at granting free public transport is consigned to the history books, a new plan is being created and will be submitted to parliament in the coming months.

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