Switzerland will raise its value-added tax rate for a decade to boost defense spending, its government announced today.

“In view of the deteriorating geopolitical situation, the Federal Council wants to substantially strengthen Switzerland’s security and defense capabilities,” the statement reads. “To this end, additional resources in the order of 31 billion Swiss francs [€33 billion] are required.”

The Council plans to temporarily raise VAT by 0.8 percent from the current 8.1 percent for 10 years, as of 2028. The additional revenues will be allocated to an armament fund that will also have borrowing capacity.

However, raising the VAT requires a change in the constitution and a public consultation will open in the spring.

Switzerland has been rethinking its defense stance since Russia’s attack on Ukraine almost four years ago. It is looking for more military cooperation with European nations and ramping up its rearmament, although it still has no intention of joining NATO.

Switzerland spends about 0.7 percent of its GDP on defense, one of the lowest rates in Europe. The current goal of boosting that to 1 percent by 2032 is now out of date, the Federal Council said.

“Due to the savings made in recent decades, the armed forces are also insufficiently equipped, particularly to effectively repel the most likely threats, namely long-range attacks and hybrid conflicts,” the statement added.

Priorities for the country’s armament push include short- and medium-range air defense systems, cybersecurity and electromagnetic capabilities.