Public Finances
Public debt in Switzerland is low by international standards. Public finances have been in surplus for a number of years.
Federal government spending accounts for around 33% of total public expenditure. The bulk of public spending, roughly 43%, is attributable to the cantons, while the communes are responsible for the remaining 24%.
Taxes are the main source of public revenue. There are two federal taxes: value added tax (VAT) and direct federal tax. The cantons and the communes primarily generate revenue from income tax and wealth tax.
Changes in public debt levels
Switzerland experienced a sharp increase in public debt during the 1990s, rising from 30.9% of GDP in 1990 to 52.8% by the end of 2004. Following the introduction of a spending cap by the federal government in 2003, Swiss government debt levels declined once again. By 2014 the debt-to-GDP ratio had fallen to 34.7%.
Switzerland's consolidated public accounts (federal government, cantons, communes, and social security) have posted a surplus or only a small deficit since 2006, except for the 2020–21 period, when the deficit was slightly higher due to the COVID-19 pandemic. Switzerland's fiscal balance has been back in positive territory since 2022.