Goods and Services Tax has been with us for almost 25 years now:

Goods and Services Tax (GST) is a value added tax introduced in New Zealand on October 1, 1986 at 10%, and later increased to 12.5% on July 1, 1989, and was increased to 15% on October 1, 2010.

[Via Goods and Services Tax (New Zealand) – Wikipedia, the free encyclopedia.]

#### Easy sums at 10%

When GST was first introduced at 10% the sums were easy: if an item was worth $100, for example, and you needed to add 10% GST, then all you had to do was divide 100 by 10 and add: `100/10`

=$10. `$10+100 = $110`

.

If you knew a price included GST then you’d divide by 11 and subtract: `110/11`

= $10. `$110-10 = $100`

.

#### Easy sums at 12.5%

Even at 12.5% the sums were easy: divide by either 8 or 9.

If an item was worth $100 divide 100 by 8 and add: `100/8`

= $12.50. `$12.50+100 = $112.50`

.

If you knew a price included GST then you’d divide by 9 and subtract: `112.50/9`

= $12.50. `$112.50-12.50 = $100`

.

#### Impossible sums at 15%

The recent increase to 15% is a headache. You can roughly divide by 7 or 8, but neither is accurate and as the amounts involved increase, the error increases too.

If an item is worth $100 divide 100 by 7 and add: `100/7`

= $14.28. `$14.28+100 = $114.28`

. In fact at 15% it should be $115.

If you know a price includes GST then divide by 8 and subtract: `115.00/8`

= $14.37. `$115.00 -14.37 = $100.63`

. Where, of course, it should be $100.

Still, as a rough guide while shopping it does, sort of.

#### The simple and brilliant

GST app

One New Zealand accounting firm has taken the brilliant step of creating a handy app, just for GST — Kiwitax GST Calculator iPhone App:

The Kiwitax GST Calculator is a quick and easy tool for working out New Zealand GST amounts at both 12.5% and the new 15% rate. With 3 useful functions it adds GST to exclusive prices, removes GST from inclusive prices and converts prices at 12.5% GST to 15% GST. A helpful, useful app for small business owners and anyone wanting to calculate GST on the move, anywhere, anytime.

This is a simple app that does only a couple of things, but what handy things it does. If you’re a Kiwi with an iOS device just go download this one now. It’s free.

Thanks, Kiwitax.