It is one of the various modes used for taxation: income, things owned (property taxes), money spent (sales taxes), miscellaneous (excise taxes), etc. It is a regressive tax, such that the lower the income is, the higher the percentage of income applicable to the tax.
Rich foreign nationals resident in Switzerland can be taxed on a lump-sum basis if they do not work in the country. This taxation is based on estimated living expenses rather than on real income and assets.
Seen as unfair, lump-sum taxation has been abolished in several cantons. However, a national abolition was rejected by referendum in 2014. At the end of 2016, 5,000 people were subject to lump-sum taxation in Switzerland.