Economic Factors Underlying Postal Reform in the European Union

Crew, Michael A.; d’Alcantara, Gonzales; Kuypers, Bert; Claeys, Philippe

doi:10.4337/9781848444904.00021

Cited by 6 publications

(2 citation statements)

References 11 publications

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“…The significance of VAT exemptions to the emergence of competition in liberalized postal markets has not been explicitly analyzed and discussed: while De Donder et al (2009) focus on the pricing and welfare implications of changing a postal operator's VAT status, Dieke and Elixmann (2005) try to quantify the effect of VAT exemptions for postal operators on government tax revenue. Crew et al (2009) discuss the importance of VAT exemptions in the framework of the prospective study by PwC (2006).…”

Section: Introductionmentioning

confidence: 99%

Impact of VAT Exemptions in the Postal Sector on Competition and Welfare

et al. 2010

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In most member states of the European Union (EU), universal postal services provided by the incumbent operator are exempt from value added taxes (VAT) on the grounds that they are the "public postal service." Other postal service providers have to charge VAT at the standard rate. The paper sheds light on the main competitive impact of VAT policies while showing the consequences on overall welfare. We show that the results are very sensitive to the operators' labor policies. Consequently, VAT exemptions have a different impact in countries with different labor regulations. The comprehensive treatment of competition and welfare enables us to provide guidance on how to resolve the policy trade-off between consumer surplus, government tax revenue, and a level playing field in liberalized postal markets.

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Section: Introductionmentioning

confidence: 99%

Impact of VAT Exemptions in the Postal Sector on Competition and Welfare

et al. 2010

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“…De Donder et al (2009) focus on the pricing and welfare implications of changing a postal operator's VAT status. Crew et al (2009) discuss the importance of VAT exemptions in the framework of the prospective study by PwC (2006). Dietl et al (2011) base their study on our framework and utilize the results to derive further insights and implications for the postal market.…”

Section: Literature Reviewmentioning

confidence: 99%

Competition and Welfare Effects of VAT Exemptions

Dietl¹,

Jaag²,

Lang³

et al. 2011

The B.E. Journal of Economic Analysis &Amp; Policy

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istortions under the value-added tax (VAT) arise partly from the exemption of specific services and sectors. This paper develops an analytical model that is applicable to any sector characterized by asymmetric VAT exemptions of services and activities. We analyze the effects of such asymmetric tax regimes on market shares, optimal prices, tax receipts, and social welfare. The analytical model shows how asymmetric VAT exemptions distort competition by strengthening the competitive position of non-rated firms. The net effect of such tax exemptions depends on the fraction of VAT-rated inputs versus the fraction of non-rated customers. We further elucidate main competitive impacts of VAT policies, while showing their consequences on overall welfare by presenting simulation results based on a calibrated quantitative model of a selected sector. Our paper provides guidance on how to resolve the policy trade-off between a level playing field in the market, consumer surplus, and government tax revenue. DOI AbstractDistortions under the value-added tax (VAT) arise partly from the exemption of specific services and sectors. This paper develops an analytical model that is applicable to any sector characterized by asymmetric VAT exemptions of services and activities. We analyze the effects of such asymmetric tax regimes on market shares, optimal prices, tax receipts, and social welfare. The analytical model shows how asymmetric VAT exemptions distort competition by strengthening the competitive position of non-rated firms. The net effect of such tax exemptions depends on the fraction of VAT-rated inputs versus the fraction of non-rated customers. We further elucidate main competitive impacts of VAT policies, while showing their consequences on overall welfare by presenting simulation results based on a calibrated quantitative model of a selected sector. Our paper provides guidance on how to resolve the policy trade-off between a level playing field in the market, consumer surplus, and government tax revenue.

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Services of General Economic Interest in the Postal Sector

Zhu

2020

Services of General Economic Interest in EU Competition Law

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Economic Factors Underlying Postal Reform in the European Union

Cited by 6 publications

References 11 publications

Impact of VAT Exemptions in the Postal Sector on Competition and Welfare

Impact of VAT Exemptions in the Postal Sector on Competition and Welfare

Competition and Welfare Effects of VAT Exemptions

Services of General Economic Interest in the Postal Sector

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