This preview shows page 1. Sign up to view the full content.
Unformatted text preview: gencies acting in the cantons, or cantonal agencies acting in the communes. The Communes act as
implementation agencies of the canton or the Confederation, most often with the capacity of performing more than
required minimum service level if they want so, with the additional difficulty (from an analytical point of view) to
distinguish what is the required standard and what is "choice" component. 3.4. Public revenues
In 1998, public revenues of the Confederation, the Cantons and the communes amounted to 1142'000 millions SFr.
Since 1985, 1998 was the tenth year where total revenues were not sufficient to cover total public expenditures at each
level of government. The total deficit runs to 1 459 millions SFr. which represents almost 2.5 per cent of GNP. The
three levels of government were in the red. Details of public revenue sources are given in table 7. Taxation is the most
important single source of revenue for the three levels of government (table 8). The tax system contains a certain degree
of flexibility. These variables are largely in the command of the cantons and the communes and consequently determine
the volume of financial resources at their disposal, thus the extent of their autonomy. 3.4.1. General characteristics The main characteristics of the fiscal-financial system are the following.
1. 2. 3. 4. 5. 12 Each level of government and each government within the same level has direct access to many, but at least two major
revenue sources: at the federal level, direct taxation and VAT; the cantonal level, direct taxation and grants + revenue
sharing; at the local level, direct taxation and user charges. Direct access to taxes and user charges is important in order to
maintain financial autonomy.
Based on VAT with an actual normal rate of 7.5 %, the main consumption and expenditure taxes are exclusive and belong
to the federal level. Taxation on motor vehicle is cantonal; the communes can levy minor taxes on dogs, entertainment and
Direct taxation is a joint taxation of the Confederation (individual income + corporate profit), the Cantons and the communes
(individual income and wealth + corporate profit and capital). For the Cantons and the communes, taxation of individual
income and wealth and of corporate business profits and capital ("direct taxation") is the major source of revenue (43 and
47 per cent).
For the communes, revenues from public property (7 %), user charges from local public services (mainly: water, sewage
and purification plants, garbage collection) and indemnities (in total 28 %), are in sum the second most important revenue
sources. However, these sources are limited. Revenues from immovable properties, whether public or private, are subject
to the federal legislation on rent control. The total amount of user charges for one single function cannot exceed total costs
(i.e. user charges must be genuine cost-prices for public services, and not disguised taxes) owing to the jurisprudence of
the Federal Court of Justice with regard to the quid-pro-quo rule in benefit taxation.
The Cantons and the communes have a rather low dependence on transfer payments: the Cantons receive 17 % of total
revenues in the form of specific grants from the Confederation, and the communes 13 % from the Cantons. Without the deficit of th...
View Full Document