Yes‚ you really will be paying 7% more for everything

Confusion over the difference between a percentage increase and a percentage point increase was clearly illustrated in some of the responses union leader Zwelinzima Vavi received when he tweeted that everything would go up from Sunday due to a 7% increase in VAT.

VAT increased on Sunday by one percentage point from 14% to 15%.

“Today the poor will start feeling the real meaning of the ‘new dawn’! The price of everything is going up due to a 7% increase of VAT! The poor is being made to pay for the mistakes of the political elites and the capitalist crisis‚” Vavi said on his Twitter account @Zwelinzima1.

The union leader immediately came under flak on Twitter‚ with some accusing him of lying while others accused him of ‘political point scoring”.

Some even suggested it was an April Fool’s joke.

Boti Jabu @RSAinvestigator tweeted: “Vat was 14% and now it has been increased by 1% to 15% ……stop lying.”

“Ooow @Zwelinzima1 lying is in your DNA moes. Vat increase is 1% not 7%‚” tweeted mbudzeni @Mapwali

Godfrey Mu @101blackpower said: “Why Mr. Vavi is also politicing [sic] with maths now? Has now 1% turned into 7% can you please just tell us the formula you are using so we are also clear.”

A response from Donsie @Donsie_Prince read: “as a maths graduate I am failing to understand why 1% increase ==> 7% increase. I will look that up and inform myself.”

Sivuyisiwe Thomas Walaza Sitsholwana @jesus_is black wrote: “Zizo baba… End of story… 7% is political point scoring by Vavi to stay relevant… What is the membership percentage of the federation kanene Mr. Vavi?”

He subsequently suggested: “Lol okay guys the 7% increase in this tweet is the April fools joke… The rest is really real…”

Zwelinzima‚ in good humour‚ responded: “Hahahaha please don’t expose your ignorance but then accuse me of lying! Go calculate the percentage of an increase from 14% to 15%.”

It eventually took a chartered financial analyst (CFA) to explain the difference between a percentage increase and a percentage point increase.

Nerina Visser CFA @Nerina_Visser explained: “Let’s get this #VAThike right: it has increased by 1 percentage POINT from 14% to 15%‚ which is an increase of 7.1% in the VAT RATE. The impact is an increase of 0.877% on what you PAY (from R114 to R115 on something that costs R100 excl. VAT) #mathsmatter #Budget2018.”

– TimesLIVE

Source: TMG Digital.


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