Nigel Stapleton, who took over as head of Postcomm last month, told a postal conference in Amsterdam that there must be a level playing field for all companies wanting to trade in postal services and that the Royal Mail's exemption from charging VAT is unfair.
At present, rival postal groups must charge 17.5% VAT on their services.
Stapleton's comments are likely to put further pressure on the Treasury to take action. The regulator does not have the power itself to scrap Royal Mail's privilege.
According to The Times, Stapleton was also expected to pressure Royal Mail on opening its infrastructure to more rivals following the distribution deal with UK Mail, a subsidiary of Business Post, a few weeks ago.
From April, UK Mail will collect batches of 4,000 letters or more from business customers, sort them and then hand them to Royal Mail whose staff will deliver them to households.
It is understood that Stapleton does not want to see Royal Mail dragging its feet over competition. It took two years to agree the deal with UK Mail.
Royal Mail is to be asked to produce a business plan that will run up until 2011.
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