State and church: the parliament building (left) and St Peter's church in Bern (Keystone

Neuchâtel church tax goes up in smoke

by Simon Bradley, swissinfo.ch

Churches in canton Neuchâtel are still in disbelief after cigarette giant Philip Morris International decided to quit paying local voluntary church tax.

In Switzerland churches of the state-recognised faiths – mainly Catholic and Protestant – receive SFr1.9 billion ($1.9 billion) annually from the cantons via taxes on individuals and companies. But amounts and tax regimes vary hugely by region.

“This chapter is over; it finished badly,” Gabriel Bader, president of Neuchâtel’s protestant church synod council, told swissinfo.ch.

“We don’t think what they did was correct but we have to look to the future and alert our partners as there will be a shortfall in the money available and we need to assess the damage.”

Bader was referring to the decision by Philip Morris to stop paying SFr1.5 million in voluntary church tax to the canton of Neuchâtel in western Switzerland . The company employs some 1,300 people in the canton, at a cigarette factory and tobacco research centre and is its largest taxpayer.

The Protestant church was due to receive SFr800,000 from the tax, while the local Roman-Catholic Federation would have got SFr700,000 and the Christian Catholic church SFr20,000; these represent ten and 15 per cent of the Protestant and Roman Catholic churches annual budgets, respectively.

Bader regrets the suddenness of their decision made in October, which affects outgoings for 2010 that have already been made.

“And it’s extremely serious that we were kept out of recent talks between Neuchâtel government and Philip Morris concerning the tax,” he added.

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