The Swiss government has announced a temporary increase in the value-added tax (VAT) rate by 0.8%, from 8.1%, for a period of 10 years, starting in 2028.

This measure is intended to generate additional resources of approximately 31 billion Swiss francs (33 billion euros) to strengthen the country's defense capabilities, in the context of the deteriorating geopolitical situation. The additional revenues will be directed towards an armament fund, which will also have the capacity to borrow. The increase in VAT requires a constitutional amendment, and a public consultation will be organized in the spring. Switzerland has been reviewing its defense strategy since the beginning of the conflict in Ukraine, considering closer military cooperation with European nations, although it does not intend to join NATO. Currently, the country allocates approximately 0.7% of GDP for defense, one of the lowest rates in Europe, with the goal of increasing this figure to 1% by 2032. The priorities for armament development include air defense systems, cybersecurity, and electromagnetic capabilities.