Switzerland has the lowest VAT rate in Europe. Now the Swiss government wants to increase it from 8.1% to 8.9% to pay for national defence. An explainer on the Swiss peculiarities of the most commonplace of all taxes. Why does the Swiss government want to increase VAT? The Swiss government wants to increase VAT by 0.8 percentage points for ten years from 2028 in order to strengthen defence. Switzerland has placed less importance on its defence capabilities in recent decades. Now the defence ministry has come to the conclusion that the threat situation for Switzerland will be particularly great in the coming years, with Russia ready for a major attack on Europe via Ukraine as early as 2028. “Switzerland is also affected by these developments and is already confronted with hybrid conflict management,” the governing Federal Council states. The threat also results from a weakening of NATO. Surrounded by NATO countries, Switzerland has benefited from their security architecture in …