By international standards public debt in Switzerland is low. Over the last few years public finances have consistently been in surplus.
Federal government spending accounts for around 33% of total public expenditure. At roughly 43%, cantonal spending accounts for the bulk of total public expenditure, while the remaining 24% is spent at communal level.
Taxes are the main source of public revenue. There are two federal taxes – value-added tax (VAT) and the direct federal tax. For the cantons and the communes, the main sources of revenue are personal income tax and private wealth tax.
Changes in public debt levels
Switzerland experienced a dramatic rise in its public debt during the 1990s, going from 30.9% of its gross domestic product (GDP) in 1990 to 52.8% by the end of 2004. Following the introduction of a cap on public spending by the federal government in 2003, Swiss public debt shrank. By 2014 its debt-to-GDP ratio had fallen to 34.7%.
Switzerland's consolidated public accounts (Confederation, cantons, communes, and social security system) have posted a surplus or only a slight deficit since 2006.