The National Council - Switzerland’s lower house of parliament - has voted to scrap most value-added taxes (VAT) on petrol and diesel. It is hoped that the move will slow the meteoric price rises seen in fuel in recent weeks, after the Russian invasion of Ukraine destabilised global markets.

Most VAT on petrol and diesel could be scrapped in Switzerland

In a move that will come as a welcome surprise for drivers in Switzerland, the National Council voted to approve a bill created by National Councillor Franz Grüter that would cut VAT charges on fuel taxes, taxes on mineral oils, surcharges on mineral oils and taxes on the import of gasoline from overseas. This scraps the majority of VAT taxes levied on petrol and diesel, although some charges will remain.

“Of course, I'm very happy,” Grüter declared after the vote. He said the change would save around seven rappen (centimes) a litre if it were to be implemented, granting "urgently needed relief in people's wallets, especially for families and low-income earners."

VAT cut to move to Switzerland's upper house

The reform to the Swiss tax system passed the council by 105 votes to 84, after the motion received the backing of the Swiss People’s Party, FDP. The Liberals and elements of The Centre. Now the vote faces a new challenge as it moves to the upper house (Council of States), but if the same coalition holds, it should have enough votes to pass.

The motion is not without its critics, with National Councillor Leo Müller saying that excluding a product from parts of VAT and not others would cause such an administrative challenge as to make the savings impractical. However, he did concede that skyrocketing fuel prices - and the increased cost to other goods in Switzerland - meant that there was a need for action, which is why he abstained from the vote.