Impact of VAT Exemptions in the Postal Sector on Competition and Welfare
AbstractIn 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.
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Bibliographic InfoPaper provided by University of Zurich, Institute for Strategy and Business Economics (ISU) in its series Working Papers with number 0145.
Length: 15 pages
Date of creation: Nov 2010
Date of revision:
Value-added tax; indirect taxation; tax regulation; tax exemption; universal service obligation; postal sector;
Other versions of this item:
- Helmut Dietl & Christian Jaag & Markus Lang & Martin Lutzenberger & Urs Trinkner, 2010. "Impact of VAT Exemptions in the Postal Sector on Competition and Welfare," Working Papers 0022, Swiss Economics.
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- H25 - Public Economics - - Taxation, Subsidies, and Revenue - - - Business Taxes and Subsidies
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
- L87 - Industrial Organization - - Industry Studies: Services - - - Postal and Delivery Services
This paper has been announced in the following NEP Reports:
- NEP-ACC-2011-06-18 (Accounting & Auditing)
- NEP-ALL-2011-06-18 (All new papers)
- NEP-EUR-2011-06-18 (Microeconomic European Issues)
- NEP-PUB-2011-06-18 (Public Finance)
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- Helmut Dietl & Christian Jaag & Markus Lang & Urs Trinkner, 2010.
"Competition and Welfare Effects of VAT Exemptions,"
0024, Swiss Economics, revised Oct 2010.
- Christian Jaag, 2010. "Bestimmungsfaktoren für die Wettbewerbsentwicklung in Briefmärkten," Economics Musings 0001, Swiss Economics.
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