Due to the electrification of the transportation sector, Switzerland expects to lose substantial revenue from its mineral oil tax and envisions a distance-based levy on electric vehicles as an alternative source of revenue by 2030.
The distance-based levy would differ by vehicle type and weight, such that the tax burden on electric vehicles mimics that on fuel-based cars and the price of mobility remains unchanged.
Key Messages
- Electrification of the transportation sector can reduce public revenue substantially; in Switzerland, the loss is estimated at up to 2 billion Swiss francs per year (2021 prices) in a net zero by 2050 scenario relative to business as usual.
- To address the revenue gap, alternative sources from electric mobility need to be sought, and distance-based measures are one option.
It is imperative to start the process of developing alternative revenue streams early, to allow time to enact the necessary legislation. In Switzerland, public consultations and parliamentary debates are expected in 2025 and 2026, with the levy to enter into force by 2030.
Keywords
fiscal impactsnew revenue streamspolicy processtax basetransition