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On Sunday 27 September 2026, the canton of Vaud approved the popular initiative "Baisse d'impôts pour tous", known as the 12% initiative, with 53.14% of the vote. Turnout was close to 50%. From the 2027 tax period, cantonal income and wealth tax on individuals will fall by 12% for every taxpayer.
The Council of State and the cantonal parliament had recommended a no vote. Here is what the text provides, what it replaces and what it changes for self-employed people and SME owners in Vaud.
Who launched the initiative
The Fédération patronale vaudoise (FPV), the Vaud Chamber of Commerce and Industry (CVCI) and the Chambre vaudoise immobilière (CVI) filed the initiative in 2023 with around 28,000 signatures, against 12,000 required. The backers argued for middle-class purchasing power, as health insurance premiums and rents keep rising, and for the canton's competitiveness, since its taxation of individuals is among the heaviest in Switzerland.
The left and the unions opposed the text. They argued that a flat cut mainly benefits high incomes and large fortunes, and that it puts public services at risk.
What the text provides
The initiative cuts cantonal income and wealth tax by a flat 12%, whatever the income level. It replaces the gradual cut already passed by the cantonal parliament, which was due to reach 7% in 2027. The two cuts do not add up.
The text also included a clause that voids the recently adopted reform of the tax shield (bouclier fiscal). The Council of State now has to revisit that file.
How much taxpayers will save
The figures depend on who you ask. During the campaign, the backers and the cantonal tax administration (ACI) calculated the annual saving for the same sample households and reached very different results.
Estimated annual saving on cantonal tax (source: Blick, August 2026)
| Household | Income | According to backers | According to the ACI (2027) |
|---|---|---|---|
| Single, no children | CHF 80,000 | CHF 869 | CHF 495 |
| Married couple, two children | CHF 125,000 | CHF 1,203 | CHF 634 |
| Retiree | CHF 125,000 | CHF 2,008 | CHF 911 |
The ACI figures take the cuts already planned for 2027 into account, which partly explains the gap. Taxpayers covered by the tax shield and those who pay no cantonal tax will see no difference.
What does not change
- Direct federal tax stays the same.
- The initiative does not touch the municipal tax multiplier. Each municipality still sets its own rate.
- Profit and capital tax on companies (GmbH/Sàrl, AG/SA) is not affected. The text only covers individuals.
What it means for the self-employed and SME owners
Sole proprietorship
The profit of a sole proprietorship is taxed as the owner's income. The 12% cut therefore applies directly to cantonal tax on that profit, from the 2027 financial year. If your 2027 provisional instalments do not reflect the cut, you can ask the ACI to adjust them.
GmbH and AG
The company itself does not pay less tax. The owner-manager, however, benefits on their salary, their dividends and the wealth represented by their shares. The comparison between a sole proprietorship and a GmbH shifts slightly without flipping. We walk through that calculation in our article on when to switch from a sole proprietorship to a GmbH.
Employers: withholding tax
Vaud's withholding tax scales include cantonal tax, so the 2027 scales should reflect the cut. Check them once the ACI publishes them, before you run January payroll. Our article on withholding tax scales explains how they work.
The political fallout
The Council of State must absorb CHF 272 million less revenue into a 2027 budget that was already in deficit. Finance minister Christelle Luisier said the government will have to find a path back to balance, without naming specific measures. The initiative committee is calling for full implementation from 2027 and tighter control of spending.
The left and the unions say voters approved a tax cut, not the closure of services or cuts to benefits, and have promised to fight any reductions. The Union of Vaud Municipalities (UCV) had also recommended a no vote. It fears the canton will shift costs onto municipalities, which would then have to cut services or raise their own taxes.
Getting ready for 2027 with Bill Alps
A self-employed person can only plan around a tax cut if they know their profit throughout the year. Bill Alps keeps your invoices, expenses and payroll in one place, which gives you an up-to-date estimate of your profit to adjust your instalments.
- On 27 September 2026, Vaud approved the 12% initiative with 53.14% of the vote.
- Cantonal income and wealth tax on individuals falls by 12% from the 2027 tax period.
- This cut replaces the 7% planned for 2027. The two do not add up.
- Federal tax, the municipal multiplier and corporate tax are unchanged.
- The canton loses CHF 272 million a year and must rework its 2027 budget.
- Self-employed: check your 2027 instalments. Employers: check the 2027 withholding tax scales.