§ 33. Mr. Madelasked the Chancellor of the Exchequer if he is satisfied with the operation of the car tax; and if he will make a statement.
§ Mr. Peter ReesYes. Car tax at 10 per cent. was introduced in 1973 partially to compensate the revenue when the purchase tax rate of 25 per cent. on cars was replaced by an incoming VAT rate of 10 per cent. The rate of car tax has remained unchanged since 1973 and is not subject to the regulator; two factors that have assisted the forward planning of the motor industry. As a tax on passenger vehicles it is paid in the main by manufacturers and yielded £380 million in the last financial year with an approximate cost of collection of 02p in the £.