Assume initial volume of fresh sludge = 100 units
Moisture content = 99% $⇒$ Solids = 1 unit
After thickening, moisture content = 96%
Solids = 1 unit $⇒$ this forms 4% of total volume
So, new volume = $\frac{1}{0.04}$ = 25 units
Reduction in volume = 100 - 25 = 75 units
Percentage reduction = $\frac{75}{100} \times 100 = 75%$