Appendix I. Summary Assessment of Practices

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Appendix II. Public Availability of Information—A Summary

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The IMF staff team visited Switzerland—Bern, Geneva, Winterthur, and Zürich—during January 16–29, 2009. It comprised Mr. Allen (head), Messrs. Khan and Schiller (all FAD), and Mr. Petrie (from FAD’s roster of fiscal experts). In Bern, the mission met with the President of the Confederation and Minister of Finance (Mr. Merz), and officials from the Federal Finance Administration (FFA); the State Secretariat for Economic Affairs; the Federal Office of Transport; the Federal Office for Buildings and Logistics; the Federal Office of Agriculture; the Federal Social Insurance Office; the Federal Department of Home Affairs; the Federal Tax Administration (FTA); the Federal Customs Administration (FCA); and the Federal Statistics Office. It also held meetings with the finance committees of the State Council and the National Council; the Swiss Federal Audit Office (SFAO); the Fund for the Financing of Public Transport Infrastructure; the Swiss Railway Company; Swiss Post; the Conference of the Directors of Finance of the Cantons; representatives of the cantons of Appenzell Ausserrhoden, Geneva, and Solothurn; Transparency International Switzerland; Hocschule Luzern; and Professor Dafflon. In Geneva, the mission met representatives of the Swiss Federal Social Security Fund (SSF), and the Centrale de Compensation (CdC). In Winterthur, it met with Professor Andreas Bergmann. Finally, in Zürich, the mission held meetings with the Swiss National Bank (SNB); Economiesuisse; Avenir Suisse; Credit Suisse; and PWC. The mission would especially like to acknowledge the extensive support provided by Mr. Zurbruegg, Ms. Huerzeler, Mr. Martinez, and other officials of the FFA.


Art. 99 of the Federal Constitution; the National Bank Act of October 3, 2003; the National Bank Ordinance of March 18, 2004; and the Federal Act on Currency and Payment Instruments of May 1, 2000, provide the legal framework for the SNB.


The SNB is governed by a supervisory council comprising 11 members, 6 of whom are appointed by the federal government and 5 by the general meeting of shareholders. Its day-to-day operations are managed by an executive board comprising 3 members and 3 alternates—with 6-year terms of office—nominated by the council and approved by the federal government.


The SNB’s annual report ( incorporates two chapters covering in detail the UBS transaction.


This report uses the term “corporation,” consistent with GFSM 2001; the Swiss government generally uses the term “enterprise.”


Information provided by the authorities (as of December 31, 2007).


For Swiss Post, for example, the Post Law of 1997 and the Post Organization Law of 1997, establishing the Swiss Post and defining its organizational structure, as well as the Post Regulation of 1997, providing directives for its operations, establish the legal framework.


For Swiss Post, for example, the Regulatory Office for the Post issued directives on December 7, 2004.


Swiss Post transferred dividends to the budget in 2007 for the first time, while Swisscom has transferred dividends to the budget for several years.


The so-called corporate governance report of the federal council is available in the internet under This report distinguishes between four different tasks of government: (i) preparation and implementation of government policies (ministerial tasks); (ii) provision of goods and services under monopoly conditions; (iii) issuance and implementation of regulations; and (iv) provision of goods and services under market conditions.


The national council is elected on the basis of a system of proportional representation. The council of states consists of 46 representatives of the cantons, 2 for each canton and 1 for each half-canton, irrespective of population, geographic size, or economic/financial status.


Reforme de la péréquation financière et de la répartition des taches entre la confederation et les cantons, September 2007,


Criteria for determining the relative “financial strength” of cantons are the taxable income of individual taxpayers, earnings from taxable assets of individual taxpayers, and the taxable profits of firms (per cantonal inhabitant in each case).


In the case of the federal income tax, for example, the details are stated in the federal income tax law (Bundesgesatz über die direkte Bundessteuer). According to the law, a taxpayer has the right to appeal before the cantonal tax authority against a tax provision within 30 days (Art. 132). If the appeal is dismissed by the cantonal tax authority, the taxpayer may appeal again within 30 days before the cantonal tax commission (Steuerrekurskommission, Art. 140). Finally, the taxpayer may appeal before the Federal Supreme Court of Switzerland (Bundesgericht, Art. 146).


See Arts. 100, 126, 159, 167, and 183 of the Constitution; the Law of the Parliament of December 13, 2002; the Finance Law of October 7, 2005; and the Ordinance on Finance of April 5, 2006. The legal base is described in FFA, Principes Applicable à la Gestion des Finances, January 2008. This document also sets out the indicative timetable for budget preparation (page 54), though the detailed timetable that each year is prepared by the FFA is not published.


The budget bill is sent back and forth between the two chambers of parliament up to three times. If there are still differences between the two chambers, the budget is sent to a “reconciliation committee,” comprising members of both chambers. In case of extreme differences, parliament has the option of sending the budget back to the federal council for revision, but this has not happened in practice.


Government officials have conducted internal assessments of historical forecast accuracy, but these have not been published, although it is intended to publish such an assessment in 2009 in conjunction with presenting the forecasts in fan chart form to illustrate the degree of uncertainty around the point estimates.


Source: La Qualité Des Previsions Economiques Suisse, Aurelio Mattei, Professor a l’Universite de Lausanne, available at


FFA, Long-Term Sustainability of Public Finances in Switzerland, April 2008.


The impetus for NAM appears to have come from a growing a realization that a simple cash-based framework was inadequate to meet the financial and other management needs of the government and parliament. While cash remained important for the management of fiscal policy at the macro level, the need to manage the agencies’ performance based on costs rather than simply cash expenditure was an important factor underlying the change. The cantons, who had already implemented accrual accounting some years ago, also pressed for harmonization. The implementation of NAM, including the IT systems, took almost seven years to complete. While capacity issues presented some challenges, and particular difficulties were experienced in connection with the introduction of internal service charges, overall the implementation process was relatively smooth compared to the experience of some other countries.


The public is informed of this practice through a regular notice in the monthly Die Volkswirtschaft / La Vieéconomique published by the Federal Office for Development and Labor.


The compilation and publication of data are governed by the Federal Law on Statistics(10/09/92) and the corresponding ordinance, and the Federal Law on Data Protection(06/19/92).


According to the IMF’s Manual on Fiscal Transparency(2007), tax expenditure is defined as “revenues foregone as a result of selective provisions in the tax code. They may include exemptions from the tax base, allowances deducted from gross income, tax credits deducted from tax liability, tax rate deductions, and tax deferrals.”


As provided, for example, by Art. 92.2 of the Constitution with respect to postal and telecommunication services. The Constitution is silent on how these universal services are to be financed.


Swiss Post has estimated the cost of their universal service obligation at CHF 212 million in 2007. This figure has been independently audited, and published in a report by PostReg (the agency responsible for regulating the postal market). Other estimates of QFAs provided informally to the mission by the authorities are CHF 150 million for the universal service obligation of Swisscom, and CHF 50 million for the under-financing of the cost of newspaper delivery by Swiss Post. See, pp. 15–16.


With effect from January 1, 1996, Switzerland has been a signatory to the World Trade Organization (WTO) Government Procurement Agreement (GPA).


The authorities have explained that the term “control” in this context should be interpreted not as “control” but as “audit.” In this case, the English translation of the law, which uses the term “control,” should be clarified.


Some of this information is published—see


While estimating the fiscal impacts of tax expenditures is complex and time consuming, the FTA has already completed a substantial amount of work on this, which could be published initially, if necessary, as work in progress.


QFAs undertaken by public corporations should also be reported in their annual reports, including an estimate of their financial impact.


In that context, budget tables should show, for the year prior to the budget year, the expected outturn for that year, and not just the original (or amended) budget.


The INTOSAI’s Lima Declaration, for example, stipulates that the procedures for removal from office should be embodied in the Constitution and may not impair the independence of the members.


The INTOSAI guidelines on conflicts of interest stipulate that when such non-audit services are provided, “the auditors should ensure that such advice or services do not include management responsibilities or powers, which must remain firmly with the management of the audited entity.”


The SFAO takes the view that transferring functions such as supervision, preparing regulations and methodology, coordination and training from the SFAO to the executive—for example by establishing a unit within the Department of Finance—could result in a decrease of independence of internal audit. However, in the IMF’s view, the existing practice may impair the independence of the SFAO.


See European Commission, 2006, Welcome to the World of PIFC: Public Internal Financial Control.


International Standard on Auditing (ISA) 700.

Switzerland: Report on Observance of Standards and Codes: Fiscal Transparency Module
Author: International Monetary Fund