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One of the privileges enjoyed by senior citizens is the senior citizen’s discount on food, when eating in restaurants and fast food outlets. But disputes often happen over the computation of the discount because of the way it is computed.
Although many seniors are interested in how much they saved, the majority is more interested in how much they are going to pay. This amount is easily obtained by dividing the sales amount by 1.4. This can easily be done because most adults have cell phones and almost all cell phones have a calculator.
Some mistakenly assume that the senior citizen’s discount totals to 12% + 20% or 32% so that they only have to pay 100 – 32% or 68%. The 12% VAT is added to the base price to arrive at the selling price but the 20% senior citizen’s discount is applied only to the base price.
Let us look at a sample computation at a fast food restaurant to arrive to see the correct procedure:
Sales Senior Citizen: 271.00
Less: 12% VAT: 29.04
Sales without VAT: 241.96
Less: 20% SC Disc: 48.39
- The sales price is divided by 1.12 and then multiplied by 12% to arrive at the VAT.
- This VAT is then deducted from the sales price to get the base price(Sales w/o VAT)
- The senior citizen discount is computed at 20% of the base price which is then deducted to get final price to be paid by the senior.
The above computation can be simplified as: for a base price of P100, P12 is added as VAT making a total of P112. Of this amount, the senior citizen pays only P80 or 80/112 or exactly 1/1.4 of the sales price.
A nice way to “feel” how much a senior saved, try computing for a purchase of P70. You will see that you will pay only P50 and save P20.