Opinion: Postal metering can overcome VAT hurdles
By director of strategy and regulatory affairs for Pitney Bowes International Tim Walsh
05 May, 2005
With the election being centre stage right now, the new VAT proposals for postal services may have slipped under many people’s radar, but they are set to have a huge impact on 1m European businesses.
Amid the excitement of impending deregulation, emerging private postal operators are lobbying the European Commission, postal regulators and national governments with a view to removing the VAT exemption currently available to the universal service providers. The private postal operators believe that they currently do not operate on a level playing field with Europe’s postal incumbents, as private companies must charge VAT on all products and services.
With an estimated £6.95bn (EUR10bn) of European postal revenue collected through the meter channel and more than 1m mailers using franking machines across Europe, the technical issues associated with collecting VAT through the meter channel must be seriously addressed by policy makers.
If VAT is not levied at a single, flat rate, it is clear that franking machines in future will need sophisticated data capture rules that allow the machines to store and collect data relating to the postal pro-ducts and services being processed by the customer. This creates additional complications depending on whether the customer pays in advance or in arrears for postage used.
At Pitney Bowes we have worked with all other European meter manufacturers to produce a position paper which sets out the issues at stake for posts and for mailers, and which outlines how the technical issues might be overcome in the event of EU member states unanimously supporting the Commission’s proposal on VAT.
Postage metering technology is an efficient and effective channel to market for Europe’s posts and trusted by mailers, large and small. It is vital that the benefits for postal productivity and efficiency be maintained in a postal VAT environment.
