The Kenya Revenue Authority (KRA) has initiated investigations into political activist Morara Kebaso, alleging that his businesses failed to file tax returns for a cumulative income of Ksh186 million over the past three years.
The taxman has identified five businesses under Kebaso’s ownership: Igrow Digital Enterprise, Morara Home Furniture, Luku Fashion, Morara Properties Limited (Blacksmith Morara Limited), and Backtent Security Limited.
In a notice to Kebaso, KRA claimed that these businesses have either declared nil income or failed to file returns despite engaging in significant commercial activities.
Three bank accounts linked to the businesses and Kebaso personally are under scrutiny for receiving substantial deposits from business operations. Most of the funds were traced to M-Pesa payments related to furniture and interior fittings.
Breakdown of Allegations
KRA reported that deposits into the three accounts amounted to Ksh9.5 million in 2022, Ksh31.9 million in 2023, and Ksh144.9 million in 2024, totaling Ksh186.3 million. Of this, Morara Home Furniture received Ksh146.9 million, accounting for nearly 80% of the deposits.
KRA alleges that Kebaso’s businesses are not registered for Value Added Tax (VAT), which is mandatory for entities with annual turnovers exceeding Ksh5 million. Consequently, the tax authority plans to forcibly register Kebaso’s businesses under the VAT Act and estimates VAT arrears of Ksh25.7 million.
Additionally, KRA has assessed income tax dues of Ksh1.4 million for 2022 and 2023, bringing the total tax liability to Ksh27 million.
The investigation also revealed that Kebaso owns several assets, including four cars, a tuktuk, and a motorcycle, which KRA says contradicts his businesses’ declared nil income.
Kebaso Responds
In his defense, Kebaso dismissed the allegations, calling them a “political witch-hunt.” He maintained that he is a law-abiding citizen and presented tax compliance certificates for 2022 and 2023 as proof. “I am a patriotic citizen who follows the law to the letter. I can never think of defrauding my beloved country in any way,” he stated.
KRA’s Next Steps
KRA has summoned Kebaso to its offices in Nairobi on January 13, 2024, to provide financial records, including bank statements, general ledgers, invoices, payroll records, and asset registers for all his businesses.
The authority emphasized that failure to comply may result in further legal action.
This investigation could set a precedent for increased scrutiny of individuals and entities suspected of tax evasion, as KRA intensifies efforts to boost revenue collection.
