In health economic evaluations, value added tax is commonly treated as a transfer payment. Following this argument, resources are valued equal to their net-of-tax prices in economic evaluations applying a societal perspective. In this article we argue that if there is the possibility that a new healthcare intervention may expand the healthcare budget, the social cost of input factors should be the gross-of-tax prices and not the net-of-tax prices. The rising interest in cost-benefit analysis and the use of absolute thresholds, net benefit estimates and acceptability curves in cost-effectiveness analysis makes this argument highly relevant for an appropriate use of these tools in prioritisation.