Tax aid for postal services threatens competition: financial expert warns of monopoly formation and loss of sales.

Tax aid for postal services threatens competition: financial expert warns of monopoly formation and loss of sales.

According to a report by www.n-tv.de, the Post's smaller competitors in the mail business fear for their existence due to a reform proposal. This stipulates that the post office should be exempt from sales tax in its corporate customer mail business, which could mean the end for the competition.

A tax break for Deutsche Post would mean that it could become cheaper to send letters for insurance companies and banks, while the small letter service providers would still have to charge sales tax. This passage in the Federal Ministry of Economics' proposed law is met with great resistance from competitors because they fear it will distort competition. The tax relief only benefits the postal service and could lead to a monopoly in this area.

The impact of this tax break can be far-reaching. By discriminating against smaller mail service providers, the postal service could further expand its market power and become a monopolist in the mail business. This would have negative effects on competition and diversity in the market. In addition, state tax revenues of more than 300 million euros per year would be lost.

The tax relief could not only lead to a distortion of the market, but could also endanger the existence of small mail service providers. In addition, the question is raised as to how it is justifiable to forego such tax revenue in times of tight budgets. Overall, the planned tax aid would not only change the market situation, but also have a financial impact on the state budget. The reform of the postal law, which is expected to be completed in spring 2024, will therefore play a decisive role for the future of the mail business.