Elimination of customs duties on industrial goods simplifies the import of intermediate goods for SMEs thus reducing their production costs.
On October 1, 2021, the Parliament decided to abolish tax on industrial goods at the Swiss border. This decision has concrete consequences for businesses in the country.
What does this mean?
A customs duty is a tax levied on imported goods when they cross the border into the destination country. This measure is one of the main instruments of protectionism.
In Switzerland, customs duties on industrial products average 1.8% of the value of the goods. They are higher for textiles and clothing, for example.
A necessary change in the law
Initially, customs duties on industrial goods protected Swiss industry from foreign competition. Today, they tend to make the purchase of intermediate goods from abroad more expensive. Hence, the Federal Council proposed to abolish them by amending the Customs Tariff Act in November 2019. Parliament accepted this change during its autumn 2021 session. Based on projections made in 2018, this abolition would save around CHF 563 million each year.
The measure will thus enable businesses to reduce their production costs. The administrative burden on companies related to imports will also decrease. This potential for indirect savings would amount to at least CHF 100 million per year.
Date of implementation
The lifting of customs duties is scheduled to take effect on January 1, 2024, thus giving the business community and the administration almost two years to prepare. This will provide them with ample time to make the necessary technical and organizational adjustments.