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Abolition of Customs Duties in Switzerland - a Major Economic Advancement

Since January 1st, 2024, the Swiss economic landscape has undergone a significant evolution with the abolition of customs duties on industrial products, a measure promising to streamline trade processes and boost competitiveness.

Simultaneously, the complex Swiss customs tariff will be fundamentally revised and simplified.

Enacted as part of an amendment to the Customs Tariff Act, these decisions stem from a meticulous analysis of the economic benefits and potential challenges.

In this article, we summarize the key aspects to remember from this groundbreaking solution to Swiss bureaucratic and economic challenges.

A Response to Longstanding Swiss Economic Challenges

The Swiss economy, known for its high costs and relatively narrow domestic market, faces competitiveness challenges on the global stage.

Tariff and non-tariff trade barriers have contributed to maintaining high prices in Switzerland, particularly for products such as textiles and clothing subject to significant customs duties.

While these duties aimed to protect the Swiss industry, they ended up increasing costs for consumers and limiting market efficiency.

The unilateral abolition of customs duties on industrial products addresses these challenges by enhancing the country's commercial attractiveness and positioning it favorably in the global economy.

By adapting to the new realities of the global market, Switzerland demonstrates its willingness to seize economic growth opportunities while countering protectionist trends.

This measure will stimulate the Swiss export economy, make trade relations more efficient, and enhance competitiveness.

Additionally, it will address certain historical anomalies in the customs tariff, such as differences in treatment between men's and women's clothing, often criticized.

Impacts on Swiss Businesses and Consumers

The abolition of customs duties on industrial products will offer a series of benefits to both Swiss businesses and consumers.

By eliminating tariff barriers, it promotes the importation of intermediate goods at lower costs, reducing administrative burdens for businesses and contributing to lower prices for imported products.

Importing businesses will be able to procure intermediate goods more affordably, thereby reducing their production costs.

In sectors where competition functions, the decrease in prices will be passed on to consumers.

The simplification of the customs tariff structure also reduces administrative burdens for businesses, thereby enhancing their competitiveness and having positive economic repercussions.

Some Points to Consider

The project aims to simplify the customs tariff structure for industrial products, encompassing all goods except agricultural and fishery products.

Swiss importers will benefit from savings on customs duties and taxes due to this abolition.

However, customs clearance procedures will remain in force in Switzerland.

Therefore, it is crucial to continue declaring goods for export from the EU and for their import into Switzerland.

The determination of preferential origin, allowing savings on customs duties, can often be avoided for deliveries to Switzerland.

However, this determination remains necessary for goods to be processed in Switzerland or exported as they are under free trade agreements.

In these cases, evidence of prior origin provided by the supplier will be indispensable.

New Challenges

The abolition of industrial customs duties leads to a reduction in federal revenues, but the expansion of economic activity should partly offset these losses through increased tax revenues.

While this decision reduces Switzerland's leeway in negotiating new free trade agreements, the impact is mitigated by the fact that industrial customs duties are less important in these negotiations.

Moreover, many potential free trade partners already benefit from customs duty exemption for most of their industrial products under tariff preferences granted to developing countries.

Thus, given the positive economic repercussions of the measure, the slight loss of negotiation power is deemed manageable.

MyTower GTM - Digitize your customs declaration management

Determining preferential origin remains necessary for goods to be processed in Switzerland or exported as they are under free trade agreements. Customs authorities conduct regular checks, thereby encouraging companies to implement compliant and secure origin management processes. This is crucial to avoid fines and maximize the benefits offered by free trade agreements.

With our solution MyTower GTM - Origin Management, the simplification of all your customs data becomes a reality, thereby facilitating the management, control, and automation of your customs operations in one place.

Calculate and validate the origin of your products while enhancing collaboration with your suppliers and customers. Through automation, accelerate and secure your origin processes while ensuring compliance.

Our solution also includes a simulation tool to quickly identify the essential data needed to calculate the preferential or non-preferential origin of your products, allowing you to optimize your efforts accordingly.

Customs declarations has never been so efficient.