In a significant development that has caught the attention of both political and business circles, Kenyan political activist Morara Kebaso is under investigation by the Kenya Revenue Authority (KRA) for allegedly failing to file tax returns in connection with Ksh 186 million in sales from five companies he is associated with. These businesses, which span across various industries, include Igrow Digital Enterprise, Morara Home Furniture, Luku Fashion, Morara Properties Ltd, and Backtent Security Ltd.
According to the KRA, Kebaso’s companies have been declaring nil income or failing to file tax returns altogether, despite owning substantial assets and undertaking significant business activities. The Authority has also flagged several bank accounts linked to Kebaso and his businesses, claiming that large sums of money have been flowing through them over the past three years. The accounts in question belong to Morara Properties Ltd, Morara Home Furniture, and Kebaso himself, with payments primarily made through mobile money services such as M-Pesa.
The taxman’s probe has raised serious questions about the transparency and legality of Kebaso’s financial dealings. The companies involved, particularly Morara Properties Ltd and Morara Home Furniture, are in sectors with high revenue potential—real estate and furniture selling—making their alleged tax non-compliance particularly alarming. These businesses are reported to have made significant deposits, mostly through M-Pesa PayBill accounts, but have not been forthcoming with their tax filings.
A Political Activist Turned Business Mogul
Morara Kebaso is best known for his role as a political activist, particularly for his advocacy on issues relating to social justice, land rights, and business transparency. However, over the years, he has also built a significant business empire through various ventures, which range from real estate investments to furniture selling. His businesses have grown substantially, and his name has become associated with wealth and influence within certain Kenyan circles.
While his activism may have earned him the respect and attention of many in the political arena, his business dealings, particularly those involving substantial financial transactions, have now raised eyebrows. Allegations of tax evasion, or at the very least, failure to file tax returns properly, have thrust Kebaso into the spotlight in an entirely different light.
KRA’s Claims: A Closer Look at the Allegations
The Kenya Revenue Authority (KRA) has stated that Kebaso’s businesses, despite their apparent success and ownership of tangible assets, have failed to meet their tax obligations. The Authority’s investigation points to five companies under Kebaso’s name that have allegedly declared nil income or not filed tax returns at all, despite clear evidence of significant revenue inflows.
According to KRA, the businesses have been operating under the radar, with some of the money transactions primarily channeled through mobile money services like M-Pesa, which are known for their ease of use and wide accessibility in Kenya. While this method of payment is not in itself illegal, it has raised concerns for the tax authorities, as it allows for large amounts of money to flow through accounts without a formal trace in terms of tax filings.
The specific businesses under scrutiny are:
- Igrow Digital Enterprise – Likely involved in digital services, technology solutions, or online business activities.
- Morara Home Furniture – A furniture selling business that could be a significant source of revenue through sales and commissions.
- Luku Fashion – A business in the fashion industry, which could involve selling apparel or accessories.
- Morara Properties Ltd – Operating in the real estate sector, this company may be dealing with property development, rental income, or sales of land and buildings.
- Backtent Security Ltd – A security services provider that may be offering surveillance, guarding, and related services.
While these businesses represent a diverse portfolio, the KRA’s concerns center around the failure to file tax returns despite the apparent profitability of these ventures.
Bank Accounts Under Scrutiny
In addition to the failure to file tax returns, KRA has also drawn attention to several bank accounts associated with Kebaso and his businesses. The Authority has listed three accounts as part of the ongoing investigation:
- Morara Properties Ltd Account: This account is connected to the real estate sector and has reportedly received a considerable amount of money, mostly through M-Pesa PayBill transactions.
- Morara Home Furniture Account: This account is linked to the furniture business, which is another industry with substantial financial flows. Like the properties account, payments here are mostly processed via M-Pesa.
- Kebaso’s Personal Account: KRA has flagged this account as well, indicating that it too receives a large amount of money, primarily payments for furniture and interior fittings from Morara Home Furniture.
KRA’s investigation suggests that the money flowing into these accounts has not been properly declared for tax purposes, leading to the assumption that Kebaso may be avoiding or neglecting his tax obligations.
Kebaso’s Response and the Legal Implications
The political activist, through his legal team, has been summoned by the Kenya Revenue Authority for an interview on January 13, 2024, where he will be required to present his business records and financial statements for review. This marks a critical moment in the investigation, as it could determine the extent of any tax evasion or non-compliance.
Kebaso, known for his vocal stance on various political matters, has yet to publicly comment on the KRA’s investigation. However, the fact that KRA has taken the unprecedented step of summoning him for questioning signals the seriousness of the allegations. If found guilty, Kebaso and his businesses could face hefty fines, legal penalties, and potential criminal charges related to tax evasion.
The consequences of such charges could have far-reaching implications for Kebaso’s personal and professional life, as well as his reputation in both the business and political communities.
A Broader Picture of Tax Evasion in Kenya
The case involving Morara Kebaso highlights a much larger issue of tax evasion and non-compliance within Kenya’s business landscape. Tax evasion has been a persistent issue in the country, with numerous high-profile cases emerging in recent years. The Kenyan government has made efforts to clamp down on tax evasion by strengthening the Kenya Revenue Authority’s enforcement powers and introducing new technologies for tracking and monitoring financial transactions.
Kenya’s tax system is often described as complex, with numerous business owners struggling to comply with the various tax regulations. However, with the rise of digital payments and mobile money platforms, such as M-Pesa, there is a growing emphasis on ensuring that all financial transactions are properly accounted for and taxed.
The KRA has been increasingly vigilant in its efforts to combat tax evasion, particularly in sectors where large sums of money are handled, such as real estate, retail, and digital services. As mobile money becomes more deeply integrated into the financial system, ensuring that business transactions are recorded and taxes are paid is becoming a critical area of focus.
Implications for Small and Medium Enterprises (SMEs)
The investigation into Kebaso’s businesses also serves as a reminder to Small and Medium Enterprises (SMEs) in Kenya about the importance of proper financial record-keeping and tax compliance. Many SMEs often face challenges in navigating the complexities of the tax system, but this case underscores the need for businesses to stay on the right side of the law.
The KRA has made significant strides in increasing awareness among business owners, offering guidance on how to comply with tax requirements and avoid pitfalls. However, for some, the process of filing returns and maintaining accurate records can still be overwhelming.
For SMEs, this case serves as a wake-up call to prioritize tax compliance, particularly as the government steps up its efforts to close the tax gap and ensure that businesses are contributing their fair share to the country’s development.
The Road Ahead for Morara Kebaso
As the investigation into Morara Kebaso’s businesses continues, the outcome will likely have significant ramifications for both his personal and business reputation. The KRA’s focus on his businesses, particularly the large sums of money being transacted through mobile money accounts, signals a broader commitment to ensuring that Kenyan businesses remain compliant with tax laws.
For Kebaso, this could mark the beginning of a challenging period. As a prominent political figure, the public’s view of his activism and business dealings may become increasingly scrutinized. The investigation’s findings will ultimately determine whether he faces any legal consequences, but in the meantime, it serves as a powerful reminder of the importance of transparency and accountability in business.
