Vaud voters approve 12% cantonal tax reduction initiative

Voters in the Swiss canton of Vaud have approved a popular initiative to reduce cantonal income and wealth taxes by 12%. The measure passed with 53% of the vote, supported largely by rural municipalities and business groups, including the Vaud Chamber of Commerce and Industry and the Centre patronal.

The tax cut is scheduled to take effect during the 2027 fiscal period. Proponents argue the reduction will increase the canton's fiscal attractiveness and boost purchasing power for the middle class. Conversely, opponents and labor unions have criticized the move as a tax gift for high earners that could lead to cuts in public services.

The result presents a significant budgetary challenge for the Conseil d'Etat. The canton's 2027 budget already faced a projected deficit of 356 million francs; the tax initiative is expected to reduce revenues by an additional 272 million francs, potentially bringing the total deficit to 628 million francs. The government must now revise its financial forecasts and determine how to compensate for the lost revenue.