European Peoples Party votes for VAT on postal services

The Nationalist party’s allies, the European People’s Party (EPP), have voted to introduce VAT on postal services in the 25 EU member states.

Up to now the 6th VAT Directive, dating back to the 1970s, has so far exempted postal services from VAT. However, in their proposal to Parliament, the Commission proposed to include postal services under the scope of the VAT regime.

The Party of European Socialist (PES) was against this proposal. The PES Group in the EP took the view that postal services are essential public service and should remain exempt from VAT.

However, an amendment tabled by the PES to reject the proposed directive was defeated by the EPP and the ELDR who voted to abolish the VAT exemption for public postal services. The ELDR are the party of outgoing EP president Pat Cox. The EPP is the sister party of the Maltese Nationalist party which was also the party which introduced VAT in Malta in 1995 and raised VAT to 18% in the budget for this financial year. Ironically, the Nationalist party is trying to make much of the fact that the EPP is, currently, the largest group in the European parliament claiming that this will given Maltese MEPs elected on the Nationalist ticket added weight.