State to subsidise Norway’s universal postal service, postal banking

State to subsidise Norway’s universal postal service, postal banking

The Norwegian Government has agreed to fund Norway Post’s unprofitable postal services. The state-owned company said last week that NOK 418m (EUR 50.7m) has been included within next year’s national budget for loss-making postal and banking services.

Norway Post welcomed the move to support the universal postal service, but said postal reforms were still needed to help it cope with changing customer requirements.

Dag Mejdell, the Norway Post chief executive, said: “We are pleased that the government will pay in full for the unprofitable postal services that Norway Post provides, including a six-day delivery of mail throughout the country.

“At the same time, we expect the government to submit proposals for new postal regulations first, which will give Norway Post flexibility to adapt to new customer needs.”

While the government will fund unprofitable postal services, it is expecting to draw a NOK 200m (EUR 24.2m) dividend from Norway Post in 2015, which the company said was anticipated to be equivalent to about half its consolidated net profit after tax. The dividend payment this year (2014) was NOK 256m (EUR 31m).

Import taxes, customs

Elsewhere in the Norwegian government’s new budget, Norway Post said ministers are proposing to increase the tax-free threshold on goods bought from abroad, from NOK 200 to NOK 500. And, the threshold for simplified customs clearance will be raised from NOK 1,000 to NOK 3,000.

With more items exempt from VAT when they are imported, this will help with cross-border e-commerce, but Norway Post said it will provide added challenges for domestic e-commerce merchants.

The company said the NOK 200 threshold has been in place since the 1970s, and that increasing the level has been debated for many years, although fears for Norwegian industry has thwarted any attempts at reform until now.

Gunnar Henriksen, executive director at Norway Post’s e-commerce division, said: “If this change is implemented, there is every reason to believe it will drive increased commerce from abroad. It will mean more packages to be delivered back to Norwegian consumers.

“I’m fairly certain that Norwegian online stores will adapt to the changes,” he added. “Some Norwegian e-commerce merchants may move their operations abroad.”

Norway Post said the raising of the simplified customs clearance threshold was less controversial than the increased VAT threshold, though “just as important”. The Post has been calling for simpler customs procedures for more than 10 years.

“Simplified customs clearance cuts down on labour and costs compared to regular customs clearance,” said Mejdell. “It means better service, lower prices and faster transmission of overseas packages to Norwegian consumers.”

Norway Post currently offers simplified customs clearance for a NOK 135 fee, while regular customs clearance costs NOK 270.

The company said when the threshold goes up, the “vast majority” of packages going to Norwegian consumers can go through the simplified customs route.

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