Swiss Senate approves modest VAT hike to fund new defence fund

The Swiss Ständerat approved a modest increase in the value-added tax to fund a new security and defence fund, passing the measure with 25 votes against 17 and three abstentions. The tax adjustment is intended to generate resources for the army over a multi-year period. While the SVP and FDP voted against the increase and presented their own financing concepts, these alternatives did not gain traction.

Defence minister Martin Pfister called the outcome a historic step toward restoring Switzerland's defence capabilities. Support also came from independent member Daniel Jositsch, who argued the move is necessary for national security. The vote follows a lengthy debate that highlighted deep partisan divisions on how to fund the military.