Switzerland’s Hidden Revenue: Tax Evasion Soars to 600 Million Francs

A recent study has revealed a staggering amount of tax evasion in Switzerland, with the country’s tax authorities missing out on an estimated 600 million francs. This figure is significantly higher than previous estimates, which had put the amount at around 300 million francs.

The Study’s Findings

The study, conducted by economists Lars P. Feld and Bruno S. Frey, used a methodology similar to that employed by the federal government in 1962. The researchers found that tax evasion varied widely across Switzerland’s 26 cantons, with some regions evading up to 35.1% of their income.

• Tax evasion rates varied significantly across cantons, with some experiencing levels of non-compliance higher than the national average.
• The city canton of Geneva saw its tax compliance rate decline significantly between 1970 and 1995.
• The study also revealed that tax evasion has been increasing steadily over time, with some cantons experiencing a sharp rise in non-compliance.

The Shadow Economy

To put these figures into perspective, the researchers compared them to estimates of Switzerland’s shadow economy. The shadow economy refers to economic activity that is not reported or taxed, and includes activities such as illegal drug trade and tax evasion.

• The shadow economy has grown from around 10% of national income in 1975 to over 15% by 2002.
• This highlights the need for effective taxation policies and enforcement mechanisms to combat tax evasion.

The Impact on the Economy

The study’s findings suggest that tax evasion is a significant problem in Switzerland, with some cantons experiencing levels of non-compliance that are higher than the national average. The researchers argue that this highlights the need for effective taxation policies and enforcement mechanisms to combat tax evasion.

• Tax evasion is not just a problem for individual taxpayers, but also has significant implications for the economy as a whole.
• Effective taxation policies and enforcement mechanisms can help to ensure fair and efficient taxation practices.

What’s Next?

The researchers are calling on policymakers to take action to address the issue of tax evasion. This includes increasing transparency and accountability in taxation practices.

• The findings of this study underscore the importance of effective tax collection and enforcement.
• We need to ensure that our tax system is fair and efficient, and that those who evade taxes are held accountable.

Full Report Available Online

The full report on Switzerland’s tax evasion problem can be found online at [insert website URL].