Germany's Merkel plans to eliminate Deutsche Post's tax advantage

German chancellor Angela Merkel plans to strip Deutsche Post AG of a tax advantage in order to appease the postal company’s competitors that deem the tax break unfair, Handelsblatt reported, citing government sources.

Under current fiscal rules, Deutsche Post’s basic postal services are exempt of the 19 pct value-added tax while comparable services provided by rivals are not, even after Deutsche Post’s monopoly on delivering letters expires at the end of the year, the paper said.

Merkel, backed by leaders of her party’s parliamentary group, wants to level that difference to allay anger over a minimum wage agreement for the postal services industry that logistics companies say puts them at a disadvantage against the dominant Deutsche Post, the paper reported, citing the sources.

Lawmaker are discussing whether the entire industry should be granted the tax break or whether the sales tax should be levied on Deutsche Post’s services,