US EditionSwitzerland to Boost Defence Spending, Funded by Sales Tax Hike
- On January 28, 2026 the Federal Council announced Switzerland will inject 31 billion francs into defence from 2028, funded by a sales tax increase of 0.8 percentage points for 10 years.
- Citing a deteriorating security landscape, the Federal Council said budget cuts left the Swiss army under-equipped and inflation with rising demand pushed up arms costs.
- Defence Minister Martin Pfister said the government will reprioritise short-term procurement to counter mini-drones, invest in IT, cyber protection, and electromagnetic reconnaissance, citing that Pfister said, 'There are critical gaps in our capabilities.'
- The proposal faces a likely referendum next year, and the military purchases fund may take on debt but must be debt-free after 10 years, with defence spending rising to around 1.3% to 1.5% of Swiss GDP, Marc Siegenthaler said.
- Currently Switzerland spends 0.7% of GDP on defence, with a national vote in summer 2027 planned to approve a tax increase effective Jan. 1, 2028.
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The Government of Switzerland announced, Wednesday, that it will increase the value added tax rate for a decade to stimulate defence costs, informs Politico.
Switzerland wants to invest an additional 31 billion Swiss francs (820 billion CZK) in defense due to the deteriorating security situation in the world. Given the higher spending on the army, the Swiss government will temporarily increase the value-added tax by 0.8 percent. The increase will take effect in 2028 and will last for ten years.
An interim victory for the Minister of Defence: Martin Pfister comments on the increase in VAT.
Switzerland plans a temporary increase in its value added tax to boost military spending.To finance the modernization of obsolete equipment in the midst of a deteriorating security landscape in Europe, the government proposes to increase the country's sales tax by 0.8 percentage points over 10 years starting in 2028.“Because of the budget cuts of recent decades, the army is not sufficiently equipped to adequately counter the most likely threats,…
Switzerland to Bolster Defence with $40 Billion Boost, Sales Tax Hike Planned
Switzerland is set to enhance its defence spending by 31 billion Swiss francs from 2028, funded by a decade-long sales tax increase. Prompted by geopolitical tensions, this initiative aims to meet critical military needs, with additional reforms for intelligence service capabilities in tackling modern security threats.
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