§ Mr. Thurnhamasked the Chancellor of the Exchequer if he will estimate the rate of value added tax which, if levied on all traded goods and services, would yield the same amount as the present selective value added tax, and indicate the effect on the retail price index of such a flat rate value added tax.
§ Mr. HayhoeIt is estimated that, if the tax was levied on all items of consumers' expenditure except rates, other statutory charges and certain services for which there would be practical difficulties, the rate of tax would need to be of the order of 9 per cent.
It should be broadly neutral in its impact on the retail price index.
§ Mr. Spearingasked the Chancellor of the Exchequer what is the basis of calculation of the harmonised value added tax basis for each member state of the European Economic Community.
§ Mr. Ian Stewart[pursuant to his reply, 3 February 1984, c. 394]: Two methods for calculating the harmonised value added tax base are open to the member states of the European Economic Community. Method A, the "returns" method, is based on values declared on traders' returns, and method B, the "receipts" method, derived from receipts of value added tax. Council regulation 2892/77, articles 4 to 8, published in the Official Journal No. L 336 of 19 December 1977 and amended in Official Journal No. L 360 of 23 December 1983, sets out the detailed rules for calculating the base.
The United Kingdom, together with seven other member states, uses method B. The Republic of Ireland uses method A. Greece has not yet introduced VAT and her own resources contributions are therefore based on her share of EEC gross national product.
§ Mr. Spearingasked the Chancellor of the Exchequer if he will tabulate in the Official Report the harmonised value added tax base for each member state of the European Economic Community for each year since the introduction of the "own resources" systems, together with the Community totals and the percentage levy for each year.
§ Mr. Ian Stewart[pursuant to his reply, 3 February 1984, c 393–94]: The harmonised VAT bases for the 563W various member states are as indicated in the table. They include all adjustments agreed with the Commission up to 30 June 1983.
Harmonised VAT Bases MECU 1979 1980 1981 1982 1983 1984 Community rate (per cent.) 0.7889 0.7322 0.7869 0.9249 0.9980 0.9971 Belgium 42,871 46,278 47,213 48,934 48,100 50,400 Denmark 24,217 26,074 24,512 26,505 27,930 29,100 Germany — 335,699 352,562 335,346 401,170 420,000 France 223,731 254,847 284,816 322,714 320,320 332,700 Ireland — 8,381 10,792 11,483 13,480 12,600 Italy 111,888 150,250 170,943 181,183 192,040 223,800 Luxembourg — 2,468 3,068 3,538 3,900 3,600 Netherlands 57,388 64,266 64,516 63,215 73,210 72,800 United Kingdom 174,787 185,627 194,180 298,386 292,560 292,700 Total 634,882 1,073,890 1,152,602 1,291,259 1,372,710 1,437,700 Notes:
- 1. Converted from national currencies at Budget exchange rates.
- 2. Germany, Ireland and Luxembourg paid GNP based contributions in 1979.
- 3. Greece at present pays GNP based contributions.