Pictet Warns Geneva’s ‘Scared Hedgehogs’ Over Tax ReformGiles Broom
Geneva residents must stop “behaving like hedgehogs on a freeway” or they will lose out in the competition among leading global financial centers, said Nicolas Pictet, a managing partner of the city’s biggest bank.
Pictet said proposed changes in personal and corporate taxation and the prospect of heavier financial regulation threaten the city’s international reputation. He spoke to reporters today on behalf of the Geneva Financial Center, a group representing 121 banks and more than 6,000 financial companies.
“We have everything required to succeed,” said Pictet, who works for his family’s bank Pictet & Cie. Group SCA. “Instead of behaving like hedgehogs on a freeway scared by the regulatory traffic and competition which will run over us, it’s up to us, Geneva, Switzerland and its residents to react, to promote our immense attributes and to opt to reinforce our competitiveness.”
Geneva will vote next month on whether to abolish a tax system based on living expenses that favors wealthy foreign residents who don’t work. Even if the city rejects the change, the system may still be scrapped as a national referendum on the so-called lump-sum forfait takes place the same day.
Swiss citizens may also come to vote on a plan to impose a 20 percent inheritance tax on estates above 2 million francs ($2.1 million), a federal tax on private capital gains and the removal of tax privileges for foreign companies. A new financial services law that could come into effect as early as 2016 also includes measures that could undermine the country’s ability to compete, Pictet said.
Geneva dropped four places to 13th position in a ranking of the competitiveness of global financial centers last month by the research group Z/Yen. New York led London and Hong Kong atop the list, while Zurich was in seventh place.