On 1st of March the Israeli Postal Authority became a government company named “Israel Post”
The move to change the legal status follows a September 2003 cabinet decision intended to open the country's postal market to competition.
In a press interview Israel Post CEO Avi Hochman said last week that the decision to turn the postal authority into a government company required it to add VAT to its prices hence, all postal services and products would increase by 9-12%.
Hochman added, however, that the company would not charge customers the full VAT rate. He also added that Postal authority employees were to move over to a five-day workweek instead of the current six-day week and that the workforce would be reduced by 450 employees over the next three years.
Hochman emphasized that his company operate in a highly competitive business environment and as such it must offer customers competitive products and prices.
He complained however that the company was required to provide services throughout the country and that their rates are under strict government supervision while the new companies that will be competing against them for the bulk mail market can set their own rates.
