KRA goes after Morara Kebaso over alleged Sh186m tax evasion

The Kenya Revenue Authority is investigating political activist and INJECT party leader Morara Kebaso for alleged tax evasion.

KRA is investigating Mr Kebaso for allegedly failing to file tax returns on Sh186 million earned by his companies over the past three years.

The authority said the vocal activist had declared zero income.

In a notice sent to Mr Kebaso, the KRA listed five(5) companies including Igrow Digital Enterprise, Morara Home Furniture, Luku Fashion, Morara Properties Limited (Blacksmith Morara Limited) and Backtent Security Limited.

The authority noted that the aforementioned companies had "declared zero income or failed to file returns despite owning properties, businesses and other assets".

At the same time, the taxman has listed three(3) bank accounts belonging to Morara Properties Limited, Morara Home Furniture, and Mr Kebaso himself, indicating that the accounts have been receiving money over the last three(3) years.

According to KRA, Morara Properties and Morara Home Furniture, operate in the real estate and furniture selling sectors, respectively, with deposits mainly coming from M-Pesa paybill transactions.

The third account, registered under Kebaso’s name, also receives payments via M-Pesa, primarily for furniture and interior fittings.

In KRA’s analysis of the three(3) bank accounts, which AVDelta News reviewed, the tax authority revealed that the accounts received trade credits of Sh9.5 million, Sh31.9 million and Sh144.9 million in 2022 2023, and 2024 respectively, bringing the total to Sh186.3 million over the past three(3) years.

Of these accounts, Morara Home Furniture accounted for nearly 80 percent of the total deposits, receiving Sh146.9 million.

“The trade credits were compared with income tax turnover declared in the income tax returns, to which it was noted that you are a non-filer, to determine undeclared income turnover. It was noted that you are not registered for Value Added Tax (VAT),” KRA said.

KRA now states that Mr Kebaso will be “forcefully registered by the Commissioner as provided for in Section 34 of the VAT Act” after his businesses exceeded the Sh5 million threshold for bank deposits.

Additionally, the authority mentioned that Kebaso’s businesses have VAT due of Sh25.7 million.

KRA also stated that a margin of 12 percent is usually calculated for businesses dealing in home furniture, based on taxpayers’ declarations.

As a result, the authority estimates that Kebaso’s businesses accumulated Sh252,091, Sh1.1 million and Sh1.4 million in 2022, 2023 and 2024 respectively in income tax.

However, the 12 percent margin was not applied to 2024, which generated Sh144.8 million, as the income tax for that year is not yet due.

In total, KRA claims that Morara Kebaso owes Sh27 million in taxes, including Sh25.7 million in VAT and Sh1.37 million in income tax.