In the spotlight – 5 questions and answers on the 2025 financial statements
The Confederation ended 2025 with a financing surplus of CHF 0.3 billion. Despite this result, federal finances remain tight.
On 18 February, the Federal Council provided information on the 2025 financial result and the fiscal policy assessment: press release. Here are five questions and answers to give context to the financial result.
- A deficit of CHF 0.8 billion had been budgeted. Is the financial result always better than projected?
Not always, but it is often the case. Receipts regularly deviate from the budget estimates. That is in the nature of a forecast. Over time, however, the receipts estimates are very precise and deviate from the budget by only 0.3% in a long-term average.
Expenditure is usually below budget. This is a result of the budget rules. These rules are designed to make it difficult for the government to spend more than the budgeted amount. This is exceptionally not the case this year, owing to various unforeseen events such as the association to Horizon Europe or the expenditure in connection with the temporary increase in receipts from the canton of Geneva (see question 2). At the same time, however, receipts were even higher than budgeted. - What is behind the temporary rise in receipts from the canton of Geneva?
The receipts stem from profit taxation on companies in the canton of Geneva. Firstly, certain companies earned unusually high profits in 2022 and 2023. This period was dominated by an unstable economic situation and volatile commodity prices, which led to high profits for energy and commodities trading companies in particular. The corresponding receipts from profit tax will only accrue to the Confederation with the final tax bill. This is because the provisional tax bills issued by the canton were still based on earlier tax assessments and were thus much too low. Secondly, the increase in receipts is attributable to subsequent provisional tax bills for 2019 to 2024 (see press release of 10 November 2025). The combination of significantly higher final tax bills and the initial provisional tax bills in 2025 resulted in temporary, unbudgeted additional receipts of 1.5 billion for the Confederation. - If the result is positive, why does the Confederation's financial situation continue to be tight?
The good financial result should not be allowed to overshadow the structural challenges that exist. The temporary rise in receipts from the canton of Geneva is already included in the financial planning. Nonetheless, the financial plans for 2027 to 2029 continue to show deficits. Although receipts are growing fast, specifically as a result of tax rises, expenditure is growing faster. The main reasons for this have been known for some time: the Armed Forces are to be expanded and AHV expenditure is increasing rapidly, partly because of the 13th monthly pension, and partly as a result of demographic factors. - Do we still need relief package 27, given the surplus of 0.3 billion?
Yes. The 2025 financial result does not change the initial situation of the federal finances. Even with relief package 27, there is a risk of structural deficits in the financial plan years. So relief package 27 continues to be necessary, in order to limit the growth in expenditure and comply with the debt brake over the long term. - What happens next?
The National Council will debate relief package 27 during the spring session. Another important factor is the proposed increase in VAT to finance the Armed Forces, which should help to stabilise the federal budget from 2028 onwards. Further developments thus largely depend on the upcoming political decisions.