On February 13th, the abolition of the stamp duty will be voted on. It is not only startups that long for its end.
Upon raising funds, companies are currently forced to give up on 1% of equity contributions, which by many is seen as a clear systematic error and flaw in the Swiss startup ecosystem. It penalizes those that strive to improve their equity base in order to invest and thereby to create jobs. After all, it should have already been clear through Covid-19 that companies need a thick layer of equity to thrive.
Advocates of the stamp duty (Emissionsabgabe) often argue that it only affects large companies. This is false. The exemption of one million francs still sounds like a lot of money. However, almost 2.300 companies have to pay the tax in this country. 80 to 90 percent of them are SMEs.
Startups also suffer, as they initially incur high development costs and cannot cover these with their newly established revenue streams yet. That is why it is often difficult for them to obtain foreign capital.
In order to survive, young companies look for investors, who obtain partial ownership using their own capital. This process is anything but easy, followed by further pressure from the state demanding a chunk of these fresh funds. This harms Switzerland as an innovation hub, especially since comparable taxes aren’t levied in many other countries that are in fierce competition.
Side note: If the tax was to be abolished, we would have to reckon with an annual loss of revenue of around 250 million Swiss francs. In relation: that's about 0,35 per cent of federal revenues. Conclusion: For relatively little money, we can sustainably strengthen Switzerland as a business location.
