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Swiss government appeals to voters to let it levy taxes

FILE PHOTO: Swiss Finance Minister Ueli Maurer attends a news conference after the vote on the Corporate Tax Reform Act III in Bern, Switzerland February 12, 2017. REUTERS/Pierre Albouy

ZURICH (Reuters) - Swiss Finance Minister Ueli Maurer on Tuesday pleaded with voters on Tuesday to let the federal government keep levying taxes when they decide on a new public finance law in March.

Under Switzerland’s system of direct democracy, voters on March 4 will have their say on extending the federal government’s right to levy federal income tax and value-added tax.

The direct federal tax and the sales tax together contributed about two-thirds of the Swiss central government’s budget, bringing in around 43.5 billion Swiss francs ($44.25 billion) in 2016.

However the right to levy the taxes is limited by the Swiss constitution, with current approval running only to the end of 2020.

Should voters reject the measure, the government would have to slash spending by more than 60 percent practically overnight or find new sources of revenue, Maurer told reporters.

“That would hardly be feasible and also not be in the interests of broad swathes of the population,” he said.

The country’s cantons would also suffer because they get part of the direct tax revenue, he said, noting the new law was not an excuse to raise taxation levels.

Parliament adopted the law without opposition after a debate on whether the federal government’s authority to levy taxes should have a time limit. The compromise solution was to extend the deadline for both levies to 2035.

Reporting by John Revill Editing by Jeremy Gaunt