As drivers in Switzerland move from petrol and diesel cars to electric, questions have been raised as to how the government plans to compensate for the shortfall in vehicle taxes, as currently, electric vehicles are not taxed as much in most cantons. Now, new leaked plans have shown the government is considering a complete overhaul of the system, with taxes on fuel scrapped in favour of a tax-per-kilometre system.

Swiss government loses revenue as people switch to electric cars

The idea, revealed by the Tages-Anzeiger, was proposed after the Federal Council recognised the fact that, as things stand, electric car owners are financially better off than petrol and diesel owners. Parts of the Federal Roads Office (FEDRO) - the body responsible for Swiss motorways and road maintenance - are almost exclusively funded by taxes on petrol and diesel.

As battery charging stations are not subject to taxation, the government is concerned that as the public switches to greener cars, it will lead to a significant reduction in funding for government departments, as every combustion vehicle on the roads gives 800 Swiss francs a year to FEDRO via taxation. In response, FEDRO is developing a new plan.

Fuel taxes in Switzerland replaced with distance-based charge

The plans would see vehicle taxes in Switzerland dramatically overhauled, according to information leaked to the Tages-Anzeiger. Among the measures are plans to scrap taxes on fuel and replace them with a tax charged by the number of kilometres driven by both electric and combustion vehicles.

Among other measures, the draft plan includes a question on whether the car tax and motorway vignette system should be scrapped as well. If passed, it would be one of the largest and quickest overhauls of the tax system in Switzerland ever.

Speaking to the Tages-Anzeiger, FEDRO director Jürg Röthlisberger confirmed, "In the future, a tax will be levied on electric vehicles." The new plans are still in their draft phase and are expected to be released by mid-2022.