Introduction
In the DigiTax dashboard, API, and POS, a DigiTax user can:
Add "Catering Levy" to an item
Add "Service Charge" to the invoice
In general, a DigiTax customer sends the "comprehensive" total amount to us, that is: comprehensive total amount = effective total amount + service charge + catering levy
DigiTax would then work backwards, removing the x% Service Charge and the 2% Catering Levy from the comprehensive total amount, giving us the effective total amount.
We then calculate the:
tax amount,
taxable amount, and
Total amount from the effective total amount.
This is what we send to KRA. Examples are shown below.
Visual references for items and invoices
First off, below are some visuals for reference.
Item without Catering Levy
Item with Catering Levy
Invoice without Service Charge
Invoice with Service Charge
Invoice type A: Item without Catering Levy and Invoice without Service Charge
For an item (VAT item with a unit price of KES 1000) without Catering Levy and Invoice without Service Charge, below is the breakdown:
Taxable Amount: 862.07
Tax Amount: 137.93
Total Amount (Send to KRA eTIMS): 1000.00
Item with Catering Levy and Invoice without Service Charge
For an item (VAT item with a unit price of KES 1000) with 2% Catering Levy and Invoice without Service Charge, below is the breakdown:
Taxable Amount: 844.83
Tax Amount: 135.17
Total Amount (Send to KRA eTIMS): 980.00
Catering Levy (2% of the comprehensive total amount): 20.00
NB: The total amount is calculated backwards from the comprehensive total amount.
Item without Catering Levy and Invoice with Service Charge
For an item (VAT item with a unit price of KES 1000) without Catering Levy and Invoice with 2% Service Charge, below is the breakdown:
Taxable Amount: 844.83
Tax Amount: 135.17
Total Amount (Send to KRA eTIMS): 980.00
Service Charge (2% of the comprehensive total amount): 20.00
NB: The total amount is calculated backwards from the comprehensive total amount.
Item with Catering Levy and Invoice with Service Charge
For an item (VAT item with a unit price of KES 1000) with 2% Catering Levy and Invoice with 2% Service Charge, below is the breakdown:
Taxable Amount: 827.59
Tax Amount: 132.41
Total Amount (Send to KRA eTIMS): 960.00
Catering Levy (2% of the comprehensive total amount): 20.00
Service Charge (2% of the comprehensive total amount): 20.00
NB: The total amount is calculated backwards from the comprehensive total amount.
Conclusion
Bearing in mind that different entities calculate levies and charges differently, the above calculations are a guide as to how DigiTax does it.