WRITTEN QUESTION E-0922/04 by Proinsias De Rossa (PSE) to the Commission. VAT on postal services.
Date: 2004-03-26
Institutions: European Parliament, Provisional data
Subjects: VAT, consumer protection, postal service, tax harmonisation, tax relief, tax system, universal service

8.4.2004

EN

Official Journal of the European Union

C 88 E/551

the Commission is participating in the negotiations in the CoE concerning a European
Currently,
Convention on Action against Trafficking in Human Beings. In particular, the Commission will as soon as
possible submit to the Council a recommendation for a Council decision authorising the Commission to
negotiate the draft convention and corresponding directives covering those Community competencies that
are relevant for a number of articles of the draft Convention. Besides this, for the remaining third pillar
issues, the Commission will submit a proposal for a common position.

The prevention of and the fight against trafficking in human beings is constantly an issue in relations
between the EU and third countries in Eastern Europe and in the Western Balkans. In the context of the
EU-Africa dialogue the Commission supported the elaboration of an action plan on trafficking in human
beings, which is (cid:1) for reasons not related to human trafficking (cid:1) still awaiting formal adoption. Another
example of the Commission’s activities is the participation as an observer in the so-called ‘Bali Process’,
which is a regional initiative including meetings at political and experts’ level in Southeast-Asia further to
the Bali Conference in February 2002 on People Smuggling, Trafficking in Persons and Related
Transnational Crime.

(1) OJ L 203, 1.8.2002.

(2004/C 88 E/0562)

WRITTEN QUESTION E-0922/04

by Proinsias De Rossa (PSE) to the Commission

(26 March 2004)

Subject: VAT on postal services

When it presented its proposal to apply VAT to postal services (1) in May 2003, the Commission said that
the fact that postal operators would be able to deduct their [VAT] costs ‘should mitigate price increases as
far as private consumers are concerned’ (source (cid:1) Commission press release IP/03/633).

How can this statement be reconciled with statements by An Post in Ireland that it has no plans to ‘pass
on’ any savings in current VAT costs in the form of reduced tariffs if this Directive is approved, as
suggested by the Commission? If An Post does not deduct these VAT costs, what is the Commission’s
estimate of the likely price increases in Ireland if this Directive is approved?

(1) COM(2003) 234.

Answer given by Mr Bolkestein on behalf of the Commission

(30 April 2004)

In May 2003, when presenting its proposal amending the Sixth VAT Directive (1) as regards VAT on postal
services, the Commission explained that once the proposal was adopted, public postal operators would, for
the first time, obtain the right to deduct VAT on their costs. This should mitigate price increases as far as
private consumers are concerned.

According to the Honourable Member, the Irish universal service provider, An Post has stated that it has
no plans to ‘pass on’ any savings in current VAT costs in the form of reduced tariffs if this Directive is
approved. Under the rules of the EC Treaty, particularly article 82, and under the provisions of Directive
97/67/EC (2), public postal operators cannot determine the prices they charge for their services, especially
in the reserved area, without regard to their costs. Directive 97/67/EC states that Member States shall
designate national regulatory authorities that shall have as a particular task to ensure compliance with the

C 88 E/552

Official Journal of the European Union

EN

8.4.2004

obligations arising from this Directive, especially the application of the principle that prices must be geared
to costs. The obligations contained in Article 14 of the Directive as regards the transparency of accounts
are intended to allow the regulators to enforce this principle. The Irish regulator Comreg thus has the tools
it needs to ensure that An Post’s prices reflect its costs and to ensure that when those costs go down as a
result of An Post’s ability to deduct VAT, the savings are in fact reflected in the operator’s prices.

(1) Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonization of the laws of the Member States
relating to turnover taxes (cid:1) Common system of value added tax: uniform basis of assessment, OJ L 145,
13.6.1977.

(2) Directive 97/67/EC of the European Parliament and of the Council of 15 December 1997 on common rules for the
development of the internal market of Community postal services and the improvement of quality of service,
OJ L 15, 21.1.1998.

(2004/C 88 E/0563)

WRITTEN QUESTION E-0939/04

by Robert Evans (PSE) to the Commission

(26 March 2004)

Subject: Ethiopia

It appears that the crisis continues in Ethiopia and shows little sign of improvement.

Would the Commission indicate the current EU contributions in food and development aid and whether it
feels this is adequate?

Would the Commission also indicate whether its discussions with the Ethiopian Government on food
security have made any progress?

Answer given by Mr Nielson on behalf of the Commission

(27 April 2004)

The Commission addresses issues such as long term food security and the threat of famine by means of all
its funding and policy instruments. This provides a coherent package of assistance to Ethiopia.

2003 has been a particularly difficult year: indeed, it has triggered an unprecedented response on behalf of
the Commission, essentially through the Food Aid Budget Line. Over 400 000 tonnes of cereals were
allocated in 2003, (of which 360 000 were delivered), amounting to more than EUR 120 million to help
alleviate the needs of approximately 13 million people living in conditions of severe food insecurity.
Afterwards, the main harvest (Kremt) from September to November was exceptionally good in 2003, thus
improving the availability of food in the country, at more affordable prices. Large marketable surpluses of
cereals have been identified (estimated at around 1,1 million tonnes according to the SIDA/WFP/EC (1)
Cereal Availability Survey). However, despite this, vulnerability remains high: over seven million people
will require almost one million tonnes of food aid in 2004. In this year of surplus production, it will be
important to import as little food aid as possible in order to avoid disincentive effects on local producers.

The Commission intends to cover approximately 20 % of the identified needs for 2004, and in order to
avoid market distortions it will buy food products predominantly from local markets.

Furthermore, while the Commission’s short-term response to the food crisis in 2003 has been very
effective,
it is increasingly concerned that a large section of the population in Ethiopia has become
vulnerable and increasingly destitute. Although food aid saves lives, it does not save livelihoods, and every
recurring crisis plunges increasing numbers of people into destitution and chronic food insecurity.