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Switzerland plans to increase its defense and security budget by 31 billion Swiss francs ($40.38 billion) starting in 2028, driven by geopolitical instability. The initiative will involve a 0.8 percentage point increase in the sales tax over ten years to fund this military expenditure, aiming for defense spending to reach 1% of GDP by 2032.

The government cites concerns over international conflicts, including Russia's invasion of Ukraine and tensions with China and the U.S. The proposal requires parliamentary approval and a public referendum, with a national vote scheduled for summer 2027.

The current VAT rate of 8.1% will increase temporarily to finance military upgrades, which are deemed necessary due to years of budget cuts. A draft law is expected by March, with parliamentary consideration in autumn.