Swiss taxes vary hugely between cantons (equivalent of a state in the US) and you pay even less than 16% depending where you live. An example based on the official Swiss Federal Tax Administration online calculator [0]. Single no children living in canton Zug Switzerland (one of the Swiss tax havens):
Gross income CHF 120'000 minus deductions you end up with 100K taxable income and the total tax burden (federal, cantonal and communal) is about 11K.
Edit: the same example for a canton with higher taxes (Bern) gives a total tax burden of 22K
Switzerland's median income is between 2.5 and 3 times that of Italy. They have a smaller black market economy than Italy, so they're likely deriving a higher actual share of taxation out of it.
Further, the 16% referenced isn't complete. If you cap out the federal income tax in Switzerland, it's more likely you're paying a total of closer to 25-30% in income taxes (depending on what part of the country you're in), between federal, cantonal and municipal income taxes.
Also there are lots of hidden costs. Health insurance and mandatory unemployment insurance etc. A lot of stuff is pushed onto the private sector but made mandatory, so you have to buy it.
This is because it's only an average not a real fact. Some people pay more, some people pay less. When you can't have more than 25K in a year, you don't pay income. If you have million you don't pay because you are smarter and can escape the tax... or at least fix it with a flat tax of 15%. Medium class pay the most but this is hidden, hidden in all the small tax.
More realistically it is because average income in Switzerland is about 2.5 times as high as in Italy. A 16% tax rate across the board in Switzerland is comparable to an across the board 40% tax rate in Italy, which is relatively in line with the actual tax rates in Italy, especially when considering that an overall poorer population may also result in substantially higher welfare costs.
