§ Mr. Anthony Grant
asked the Chancellor of the Exchequer what currently is the cost of collection of VAT in comparison with the cost of collection of purchase tax and selective employment tax in the last year of their operation.
§ Mr. Robert Sheldon
It is estimated that the cost of administering VAT in 1977–78 was about £85 million and of administering Purchase Tax and SET in 1972–73 about £10 million and £3 million respectively.
Because of the large increases in prices of taxable goods and administrative costs over the last five years it may be more convenient to compare costs in relation to net revenue. The cost of collecting each £1 of VAT is about 2p, of purchase tax was about ¾p and of SET was about ½p until the halving of the rate on 5th July 1971 raised it to about 1½p in 1972–73.