Canton of Bern: cantonal government wants to reduce tax burden

If one compares the tax burden in the canton of Berne with that in other cantons, income and profit taxes are consistently high to very high. The canton of Berne is the most expensive in an intercantonal comparison, particularly for low incomes, due to a very strong tax progression. There is also a need for action on profit tax. The canton of Berne applies by far the highest maximum profit tax rate of all cantons (in contrast, a more attractive tax rate is already applied for companies with low profits due to the three-tier rate).

The cantonal government therefore sees a need for action: it wants to reduce the tax burden in the medium to long term and has updated the canton of Bern’s tax strategy accordingly. However, it is important to him that the objectives of the tax strategy are realisable and realistic. It therefore intends to consistently exploit opportunities as part of the ordinary financial planning process (e.g. higher income from federal financial equalisation). However, the cantonal government currently rejects the idea of developing relief packages or reducing the services offered by the canton as a counter-financing measure for tax cuts.

Against this backdrop, the Government Council has set two long-term goals:

1. The general tax burden will be lowered towards the middle of the cantons.
2. The enforcement of the tax law is to be constantly simplified.

Specifically, the cantonal government would like to reduce the cantonal tax rate for natural persons by around CHF 200 million to at least 2.90 by 2030 and that for legal entities by a further CHF 100 million to 2.38 by 2027. The next revision of the tax law in 2027 will also see a review of Bern’s relatively high progression for low incomes. Relief totalling a maximum of CHF 200 million is to be used to smooth this progression. The municipalities would also have to contribute a maximum of CHF 100 million in tax relief.

Finally, where legally possible, certain non-tax objectives such as the compatibility of family and career, sustainable development and gender equality should also be promoted and the digitalisation of the tax administration should be further advanced. The detailed objectives and strategic directions can be viewed on the Tax Administration’s website.

The Bernese Tax Act stipulates that the cantonal government periodically reviews the content and implementation of the tax strategy and makes the necessary adjustments. The updated report on the tax strategy serves as a tool for future political decisions. It therefore provides detailed information on the principles of tax law and in turn sets out the Canton of Berne’s room for manoeuvre depending on the type of tax. This is considerably restricted by the Federal Constitution, the Cantonal Constitution and federal law (in particular the Tax Harmonisation Act StHG). Comprehensive intercantonal burden comparisons are at the heart of the political decision-making process. These are available in detail on the Tax Administration website. In future, they will be updated annually so that policymakers always have an up-to-date basis for decision-making.

The Grand Council will take note of the report in the 2024 spring session. Any planning declarations by the Grand Council on the report could therefore – if appropriate – already be taken into account as part of the next planned revision of the Tax Act in 2027.