EU VAT move could raise stamp prices – AN Post against move

A proposal by the EU to slap VAT on postal services could lead to a sharp hike in the cost of postage stamps.
Currently, national postal operators are exempt from VAT, but plans by the European Commission to change this could hit consumers’ pockets.

An Post said the proposal is at a very early stage, but has indicated that it is against the move. It said that the issue will be a matter for the Government but warned that if the full rate of VAT is applied at 21pc, this could bump up the price of a postage stamp from 41c to 49c.

“It’s not good news for anybody. We will be making our feelings known to the Government on the issue,” a spokesperson for An Post told BusinessWorld.

The Commission said the move would eliminate “distortions” in the market caused by the fact that traditional national suppliers of postal services are currently exempt from VAT, while their private competitors are not.

But it claimed that the change was unlikely to have a “significant impact” on postal costs because consumers are already charged “hidden VAT” by traditional national suppliers of postal services.