After the 50‘000 necessary signatures for a referendum against the STAF (Steuervorlage und AHV-Finanzierung) have been submitted, the Swiss voters will again decide on the pending corporate tax reform. Alliance Sud's tax policy analysis (available in German only) shows that, from a development perspective, the proposal does not represent any significant progress compared with Corporate Tax Reform III (USR III), which was rejected two years ago. Once again, the old special tax regimes that are detrimental to development are to be replaced by new ones.

The current proposal would bring Swiss corporate taxation into an internationally accepted form and finally abolish the old special tax regimes exclusively for foreign group profits taxed in Switzerland. This is very welcome from a development point of view. At the same time, however, it creates new opportunities for multinational corporations to shift profits. By shifting profits to low tax jurisdictions such as Switzerland, multinationals are depriving developing countries of an estimated 200 billion dollars of potential tax base every year.

Alliance Sud's detailed analysis of new tax dumping vehicle within the STAF shows that the envisaged new Swiss corporate tax policy is not compatible with the goals for sustainable development set out in the UN Agenda 2030 (Sustainable Development Goals SDG). As the country with the highest per capita density of headquarters of multinational corporations, Switzerland has a special responsibility in the fight against global social inequality and for adequate financing of Agenda 2030.

Due to the tax dumping of low-tax jurisdictions such as Switzerland, corporate taxation has been falling worldwide for decades. This prevents the most urgent public provision of health, education and infrastructure services to disadvantaged population groups in developing countries. Switzerland is not a freerider on the train that is pulling global corporate taxation into the abyss - it is rather one of the locomotives and will remain so with the STAF.

Despite the considerable shortcomings in the tax section of the bill, Alliance Sud refrains from a voting recommendation. The AHV part of the bill concerns a domestic policy issue that goes beyond the organization's development policy mandate. At the same time, the Alliance Sud members have different views on the question of the extent to which a developmentally just corporate tax reform is also possible beyond the current proposal. It is clear that such a reform remains necessary regardless of the result of the May vote.