A tax initiative of the far left submitted for vote on March 12 wants to tax all dividends from large shareholders. According to the initiators, the measure, which would affect approximately 1,600 Geneva taxpayers, should bring in an additional 150 million francs per year to public authorities. Geneva economic circles fear an exodus of large contributors, and consequences for SMEs.
The initiative proposes to tax 100% of dividends, and no longer only 70% from the moment a person holds at least 10% of the shares of a company. This is the case here. Isabelle Harsch is a shareholder in her company, the Harsch moving company. She is also an employee of the latter. It therefore pays, in addition to wealth tax, income tax.
“Often, the dividends we pay ourselves are used to pay wealth tax. The latter takes the business into consideration, but it is money that is not in a bank account.
The initiative against the virus of inequalities wants to remove the tax privileges of large shareholders.
For Romain de Sainte Marie socialist deputy, “We cannot live in a canton which mixes with extremely rich and increasingly poor people. We need the rich to contribute more.”
Contribute more to the needs of a very greedy canton in public spending.
A canton which already strongly imposes the most fortunate. Geneva lost 35 of its 300 biggest taxpayers between 2010 and 2018 according to the finance department. For those who, in addition to their personal fortune, hold significant shares in their business, the idea of moving could germinate.
For Philippe Kenel tax lawyer, “It is obvious that you will ask yourself the question of whether it is not more interesting to go to the canton of Vaud or abroad or to the canton of Schwyz”.
This initiative is considered counter-productive by economic circles. In Geneva, most taxes are paid by a minority of taxpayers.
“The ten largest taxpayers in Geneva represent 186 million. Are we ready to lose 186 to win 100 CHF?
Arguments swept away by the left.
“With RFFA, SMEs have seen their taxes go down. So coming to say that taxation is too high in the canton of Geneva is wrong,” tempers Romain de Sainte Marie.
Taxing 100% of dividends will not affect multinationals.
Rare are those who own more than 10% of these international companies. A measure that will therefore mainly impact SMEs and risks weakening the economic fabric of Geneva.
“We make amalgams when we talk about large shareholders, I own 100% of my company, but it is a small company. I’m happy to pay taxes, but they have to be fair,” says Isabelle Harsch.
The corporate world will be fixed on March 12 before a new salvo in June. Another initiative aims to levy a solidarity contribution of 0.25% on those who have more than 3 million francs, and this for ten years.
