The South African Revenue Service (Sars) appears to be pursuing the personal assets of seasoned actress and singer Tumi Masemola in an attempt to recover over R1.6 million in outstanding tax debt. This action throws into sharp relief the extensive powers wielded by the tax authority in its pursuit of tax compliance.
City Press has seen a final letter of demand issued to Masemola, indicating that Sars will seek a writ of execution authorising a public auction of her assets if she fails to settle the R1.6 million debt. The letter, dated 14 November, gave the former City Ses’la actress 10 business days to repay the full amount or enter into a payment arrangement with Sars.
When approached for comment, Sars spokesperson Siphithi Sibeko declined, citing legal restrictions on divulging taxpayer information to the media. "I am prohibited by law from divulging confidential taxpayer information, so Sars will not be commenting on your questions," Sibeko stated.
The letter stipulates that Masemola failed to file her tax returns for more than a year, prompting Sars to consider seeking a court order for payments. It also cautions Masemola that Sars has provided her with ample opportunity to rectify the alleged tax breach.
Masemola, also known as Lady Naturelle, rose to prominence as the lead singer of the pop/urban group Gang of Instrumentals. She has also featured in numerous television commercials for prominent brands such as Doritos, FNB, KFC, and Virgin Mobile.
City Press reached out to Masemola for her perspective on the matter, but she declined to comment. “I have no comment on his,” she said.
This pursuit of Masemola follows similar actions by Sars against other prominent figures. Months ago, City Press reported on Sars's pursuit of television presenter Moshe Ndiki, demanding the settlement of a R1 million claim. These cases highlight the revenue service's increasing focus on recovering outstanding tax debts from individuals in the public eye.
Sars' Wide-Reaching Powers
The South African Revenue Service is afforded extensive powers to pursue tax offenders, including conducting warrantless searches of business properties and directly debiting funds from individuals' bank accounts. These powers, while intended to ensure tax compliance, have raised concerns among legal experts and business owners.
Legal firm Shepstone & Wylie has described the powers afforded to Sars officials through the Customs and Excise Act (CEA) as "downright scary". Section 4(4)(a) of the CEA allows officials to enter premises licensed or registered with Sars without a warrant, provided the premises are occupied and used by someone licensed or registered with Sars.
The firm advises that anyone facing such a situation should immediately contact their attorney. They would then be advised that the SARS officials must be given access to the premises.
“In terms of section 4 of the CEA, if after declaring their official capacity, a SARS official who is barred from entering the licensed or registered premises may break open any door or window or break through any wall on the premises for the purpose of entry and search,” it added.
Once inside, Sars officials have the authority to question anyone on the premises and even break up ground or flooring if they reasonably believe it is necessary. Compensation for property damage is not guaranteed if the damage was caused through the official's bona fide actions.
While a 2013 Constitutional Court ruling limited warrantless searches to business premises, requiring a warrant for private residences, Sars is still legally obliged to furnish a copy of the ex parte application and supporting affidavits used to obtain the warrant.
Beyond property searches, Sars officials can stop and board any vehicle in the country, searching both the vehicle and its occupants. They also have the right to secure warehouses, storerooms, and vehicles if they suspect a contravention of the CEA.
For individual taxpayers, Sars can recover owed money through garnishee orders to employers or clients, attach bank funds, withhold tax clearances and refunds, and obtain court judgements that negatively impact credit records.
Despite these significant powers, Shepstone & Wylie emphasises that Sars must exercise them reasonably and follow proper procedure. Officials must be acting within the scope of their employment and have a genuine belief that an offence has been committed. As an organ of state, Sars has a higher duty to respect the law, fulfil procedural requirements, and act carefully when dealing with individual rights.
The courts have ruled that "there must be a rational connection between the purpose of the law and the limitation imposed by it".
The law firm warns that any entity holding a license or registration under the CEA could be subject to a warrantless Sars raid. While such a raid can be traumatic, it is crucial to remain calm and follow procedure.
“Promptly contact a legal representative and request their immediate presence to ensure that the rights are protected; and establish the purpose of the raid,” it advises. It is also important to record the identities of the Sars officials conducting the raid and document any items removed from the premises.
Tackling the Illicit Economy
These actions against individuals like Masemola come as Sars intensifies its efforts to combat the illicit economy in South Africa, which it says has reached alarming levels.
The revenue service estimates that the illicit economy, which accounted for only 4% of South Africa's GDP in 1994, has grown to between 10% and 15% of the total economy. Based on 2024 figures, this translates to illicit activity worth between R570 billion and R880 billion.
Sars commissioner Edward Kieswetter has described this figure as unacceptably high, placing a severe burden on the nation. "This activity must be met with swift and determined efforts to reverse its impact," he said.
Key contributors to the illicit economy include activities in the tobacco and cigarette, alcohol, fuel and fuel adulteration, counterfeiting, illegal mining, and smuggling of gold and other minerals sectors.
“SARS will continue to work to eliminate valuation fraud and identify unexplained wealth while integrating the informal economy into the broader tax framework,” the commissioner said.
“The success of our country depends on our efforts to decisively deal with the scourge of the illicit economy. Let it be said that we have and will continue to incessantly fight against this scourge that weighs down our economy.”
A particular focus has been placed on the illicit tobacco economy. In October, commenting on the proposed Tobacco Products and Electronic Delivery Systems Control Bill, Sars flagged a R40 billion gap in tax collection from the legitimate tobacco sector since the end of the Covid-19 pandemic.
Sars noted that the prohibition on smoking put in place during the COVID-19 pandemic by the South African government significantly altered the licit and illicit parts of the tobacco sector. This pushed traditional crime cartels, syndicates and gangs into becoming involved in the illicit cigarette trade, it said.
Citing three different research papers, the revenue service pointed to the illicit tobacco industry in South Africa being between 60% and 75% of the entire sector, with tax losses between R51 billion and R84 billion.
The rapid growth of the black market for tobacco has emboldened syndicates and mafias to expand into other illicit sectors, including mining and refinery, property development, and investments in countries such as the United Kingdom, the UAE, and central and southern Africa.
Worse still, “foreign cartels and syndicates (have) developed relationships with local cartels and syndicates and entered the South African market.“
Sars said that syndicates have formed new relationships with money laundering channels, illicit financial flows and related “service providers”, and many of these channels are rooted in the illicit tobacco sector.
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