Swiss village wins tax break thanks to billionaire

 

Residents in the Swiss village of Rüschlikon are celebrating an unexpectedly generous Christmas tax break thanks to billionaire Ivan Glasenberg, the head of commodities giant Glencore, who lives there.

The village council voted this week to cut locally levied income tax from 79 to 72 per cent after finding the municipal coffers had amassed a Sfr60million (£41m) surplus, amounting to Sfr12,000 (£8,300) for each of the community’s 5,200 residents.

The substantial windfall was both a product of Mr Glasenberg’s wealth and the Swiss tax system which obliges taxpayers to contribute to both their local authorities and central government.

The $11bn flotation of the Swiss commodity group, Glencore, in May this year turned Mr Glasenberg into a multi-billionaire.

Rüschlikon, which is on the northern shores of Lake Zurich, does not get as much sun as its super rich opposite number - the so-called "Gold coast" on the lake's southern shore - which is home to countless million and billionaires.Yet it is home to several Glencore executives.

Mayor Bernhard Elsener said after the tax break was approved by the village council the reduction was “directly linked” to Glencore’s flotation.

However he rejected demands from leftwing and church campaigners that the town should donate one million Swiss francs of the windfall to compensate communities in developing countries, which they claim have been adversely affected by Glencore's operations.

The commodities giant has been criticised by environmental and corporate-responsibility campaigners for transactions carried out in Third World countries such as Zambia and Colombia. Glencore's critics argue that it is guilty of encouraging mining companies to plunder poor countries rich in natural rescources but with weak governments.

"The people of Rüschlikon prefer to demonstrate solidarity in private rather than via the muncipality," Mr Elsener said.

The village council approved the tax break after exercising the Swiss direct democracy a system, which dictates that decisions are first taken directly by resident voters on the spot. Mr Elsener said the tax break vote attracted an unusually good turnout of some 424 voters.

Their numbers were increased by protesters from local church and leftwing organisations demanding a Third World compensation payment. The protesters distributed leaflets claiming that Glencore's business practices were "unfair and not sustainable." However their demands were voted down by a large majority.

 Mr Glasenberg's15.8 per cent stake in Glencore was worth around $9 billion on flotation. The South African born executive was granted Swiss citizenship last December and is rated as the country's eighth wealthiest person with a fortune worth between six and seven billion Swiss Francs.

Both Glencore and Mr Glasenberg refused to comment on Ruschlikon's decision to cut taxes. However the company rejected charges that its business practices exploited Third World countries. " Glencore applies strict standards at its operations around the world," a spokesperson insisted.

Swiss observers have pointed out that Ruschlikon has a vested interest in retaining its wealthy residents and doing as little as possible to offend them.

Mr Glasenberg has lived in the village in the canton of Zurich since 1994. Yet if he wanted to retain more of his fortune, Mr Glasenberg could simply move to Canton Schwyz, which starts just a few kilometres along the shores of lake Zurich and boasts the lowest taxes for the rich in Switzerland.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Project Implementation Executive

£18000 - £23000 per annum: Recruitment Genius: They work with major vehicle ma...

Recruitment Genius: Chiropractic Assistant

£16500 per annum: Recruitment Genius: A Chiropractic Assistant is needed in a ...

Recruitment Genius: Digital Account Executive - Midlands

£18000 - £26000 per annum: Recruitment Genius: They work with major vehicle ma...

Recruitment Genius: Web Developer

£28000 - £30000 per annum: Recruitment Genius: This company provides coaching ...

Day In a Page

NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
You should judge a person by how they peel a potato

You should judge a person by how they peel a potato

Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Beige is back: The drab car colours of the 1970s are proving popular again

Beige to the future

Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

Bill Granger cooks with fresh cheeses

More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

Shay Given: 'This FA Cup run has been wonderful'

The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
Timeless drama of Championship race in league of its own - Michael Calvin

Michael Calvin's Last Word

Timeless drama of Championship race in league of its own