Vexed again Perplexed again Thank God I can't be over-taxed again....

 Down in good old new Zealand our GST (goods and services tax) is about to change.

It is today 12.5%

Tomorrow it will be 15%

Ahh I hear some say 15% - now that will be an easy calculation than 12.5%

Not so dear reader. Why you ask?   Because 12.5% is 1/8 (as a fraction).

Whereas 15% is 3/20

To calculate GST on a price all you did for many years was multiple by 1/8

Thus cheapo car   GST exclusive = $1000.  GST to be added   1000x1/8 = $125.  New price $1125

(Although I prefer the direct 1000x 1.125 = $1125 as the quick way)


Now we have at present the following situation here in NU ZULUN

Cheapo car. $1000 (GST exclusive)      and  $1125 (GST 12.5% inclusive)

Now we have to find Price a 15% GST for the said cheap car.

Well if you start with $1000 (GST exclusive) it is plain driving!!!

1000 x 1.15 = $1150.   No problem.    Easy peasy and all that sort of thing by jingo.

But folks what if you want to calculate the price (15% GST) when you start with the 12.5% inclusive GST car?   ahhh there's the rub!

Do you simply go 1125 x 1.025 (that is adding the extra 2.5% GST)   oh dear no no no dear me no

Becos ....  1125 x 1.025 =  $1153.13   oh dear you see that is $3.13 too much.

But I suspect some will do just that.  The lying, scheming, scamming, cheating two-timing  ...

What is the answer to the question how do we  convert $1125 (GST 12.5% inclusive) to $1150 (GST 15%)?

Answer 1125 x 1.02222222222 = 1149.9999999 which is as good as $1150.

AAAh but some say we want a fraction ....we want a fraction  ... we want a fraction ...!

What is 1.0222222 as a fraction?

Well the fraction 5,111,111 over 5,000,000 has been suggested.



Question: How do I convert a price at 12.5% GST Inclusive to one at 15% GST????

Answer:  Multiply it by 1.02222222   (not 1.025!)

Thanks to our national government.

To sum up: A 2.5% gst increase is a 2.22% increase on current prices in the shops.

'The doggies bawl - and bawl and bawl
Deep in the heart of Taxes'.