Impact of VAT Exemptions in the Postal Sector on Competition and Welfare

Helmut Dietl, Christian Jaag, Markus Lang, Martin Lutzenberger and Urs Trinkner

No 145, Working Papers from University of Zurich, Institute for Strategy and Business Economics (ISU)

Abstract: In most member states of the European Union (EU), universal postal services provided by the incumbent operator are exempt from value added taxes (VAT) on the grounds that they are the Òpublic postal service.Ó Other postal service providers have to charge VAT at the standard rate. The paper sheds light on the main competitive impact of VAT policies while showing the consequences on overall welfare. We show that the results are very sensitive to the operatorsÕ labor policies. Consequently, VAT exemptions have a different impact in countries with different labor regulations. The comprehensive treatment of competition and welfare enables us to provide guidance on how to resolve the policy trade-off between consumer surplus, government tax revenue, and a level playing field in liberalized postal markets.

Keywords: Value-added tax; indirect taxation; tax regulation; tax exemption; universal service obligation; postal sector (search for similar items in EconPapers)
JEL-codes: H21 H25 L51 L87 (search for similar items in EconPapers)
Pages: 15 pages
Date: 2010-11
New Economics Papers: this item is included in nep-acc, nep-eur and nep-pub
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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http://repec.business.uzh.ch/RePEc/iso/ISU_WPS/145_ISU_full.pdf (application/pdf)

Related works:
Chapter: Impact of VAT Exemptions in the Postal Sector on Competition and Welfare (2011)
Working Paper: Impact of VAT Exemptions in the Postal Sector on Competition and Welfare (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:iso:wpaper:0145

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