Brussels, 07/02/2003 (Agence Europe) - The European Commission is expected to propose a Directive in March aimed at imposing VAT on postal services, it was confirmed on Friday by a Commission spokesperson. The Directive in question will make it compulsory for public operators to levy VAT, while allowing Member States to impose a reduced rate of tax between 5 and 10% for parcels weighing less than two kilos. According to the spokesperson, the directive will allow for the private and public postal services to be placed on an equal footing. The public postal services will have to collect VAT, but, because of that, they will also be able to deduct their general costs as do private services.
The Federation of European Direct Marketing considers in a press release that this draft directive could lead to an increase in costs for the sector currently exempt from VAT, such as charities, financial services and government institutions. "The postage costs are a significant part of the total direct mail expenditure and an added expense of 15-20% on potage will threaten charities' ability to collect donations", fears the General Director of Fedma, Alastair Tempest, in a press release.