Switzerland has announced plans to raise value-added tax by 0.8 percentage points starting in 2028 to fund a major military expansion and modernization, citing growing security threats. The government stated that the “deteriorating geopolitical situation” requires “substantially strengthening Switzerland’s security and defense capabilities,” with funding allocated for upgrading armed forces, missile defenses, cybersecurity, and border protection.
Long Europe’s only formally neutral state, Switzerland has traditionally avoided foreign wars and military alliances. However, in recent years, Bern has moved away from strict neutrality by expanding security cooperation with NATO, deepening defense ties with the EU, backing Kiev in the Ukraine conflict, and joining sanctions on Russia.
According to a government statement released Wednesday, the Swiss authorities need 31 billion Swiss francs ($40.4 billion) for military upgrades. This includes short-range missile defense systems, anti-drone technologies, information technology, intelligence gathering, early warning capabilities, and civilian security measures.
Currently spending around 0.7% of GDP on defense—less than half the European average—the Swiss government plans to increase this to 1.5% of GDP through the tax hike. The VAT adjustment would be implemented over ten years, with proceeds deposited into an armaments fund.
Under Swiss law, the tax increase requires parliamentary approval and a national referendum. The government aims to draft the legislation by March, present it to parliament in autumn, and hold a vote in summer 2027.
However, support for increased military spending among Swiss citizens remains low, with a recent IPSOS survey showing only 31% favor higher defense budgets—the lowest in Europe compared to Germany (60%) and France (53%).
Western leaders have increasingly cited the “Russian threat” as justification for major defense spending hikes, including pledges by European NATO members to reach 5% of GDP.
Russia has dismissed such claims, warning that “rabid militarization” risks a broader conflict on the continent. Russian Foreign Minister Sergey Lavrov accused Switzerland of “forfeiting” its neutrality and labeling it an “openly hostile state.”
