Switzerland in trouble: Citizens asked not to pay taxes because they have too much money

Switzerland has a problem - they have too much money, reports the Patria News Agency. Tax authorities in the canton of Zug have abolished early tax payment incentives and asked citizens to postpone their tax obligations as much as possible, reports the Financial Times.

In Switzerland, bank interest rates are negative, which means that clients practically have to pay banks to keep their money, so the canton of Zug does not want to accumulate cash to avoid paying interest.

According to Financial Times estimates, Zug will save about 2.5 million Swiss francs annually in this way.

"Given that low interest rates still prevail, and that we would have to pay negative interest, the Canton has no reason to encourage taxpayers to pay taxes urgently... On the contrary, it is in our interest for taxpayers to pay taxes as late as possible - in order to incur fewer interest costs," the statement from the canton of Zug states.

The Swiss National Bank introduced a negative interest rate at the end of 2014 to reduce demand for its own currency, as they assessed that too strong an exchange rate was harming the economy, writes Index.