Recently, I discussed in this column the case of a Cape Town businessman whose business and home had been searched by the South African Revenue Services (SARS) without a warrant. He had brought an application to the effect that this search was unconstitutional. His application succeeded, and the result was that the Western Cape High Court, Cape Town (High Court) held that certain sections of the Customs and Excise Act are inconsistent with the Constitution and it therefore declared them invalid.
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This part of the Act is now being rewritten to remove or modify the powers of SARS to search certain premises without warrants. Meanwhile, the Constitutional Court has confirmed that the warrantless searches were indeed unconstitutional. Clarity was also obtained from the Court in respect of the balance between the powers of SARS and the rights to privacy that every individual in South Africa enjoys under the Constitution.
Guidelines on searches and privacy
In the course of its deliberations, the Constitutional Court enunciated the following guidelines:
- A proprietor of a business generally has a reduced expectation of privacy.
- Certain businesses and their proprietors must know that their businesses will be monitored, especially those that create potential hazards to the public.
- In respect of private homes, however, there is a far greater expectation of privacy.
- Inspections are aimed at compliance, while searches are aimed at enforcement. Customs and excise must be content with inspections if compliance is the issue.
- Enforcement searches are generally more invasive and involve a greater limitation of the right to privacy.
- Private dwellings are sacrosanct and the rights of inspectors to enter these without warrants are not necessary to achieve the purposes of the Customs and Excise Act.
- The law recognises that there will be limited circumstances when the need to protect the public interest will override the requirement to have a search warrant. But these exceptions should not become the rule.
- When legislation authorises warrantless regulatory inspections, provision must be made for a constitutionally adequate substitute to ensure certainty in the conduct of the inspections and limit the discretion of the inspectors.
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Legislators to define Powers of SARS
The Constitutional Court was not prepared to rule on the powers of SARS or customs officials in respect of routine and non-routine inspections and the types of premises to which such inspections are applicable. This, according to the Court, is the domain of legislators. Although the Court confirmed the order of unconstitutionality, it was made non-retrospective. Furthermore, the order was suspended for six months to allow the legislature to amend the legislation.
Peter O’Halloran is head of tax at BDO, Gaborone. Contact him on 00267 390 2779.
