Many of us thought that Afro-pop sensation, Zahara who died last year, aged 36, left a multi-million rand estate behind from which her family would benefit. But the news coming from South Africa has shown us that if musicians do not keep financial records, they are bound to end up penniless and in trouble.
The SA Revenue Service (Sars) is targeting the estate of deceased Zahara, following a claim by the revenue collector showing that the musician had an unsettled tax debt stipulated at more than R3 million.
There is no doubt that the Loliwe hitmaker, Zahara made a lot of money through selling millions of records during her short lifetime. However, like many self-employed musicians it has come out that there was no proper financial management on her part.
We are not certain whether Zahara deliberately avoided paying taxes or she simply didn’t know how to manage her finances. That is the crux of the matter. Now, the estate she left behind is in trouble.
Born as Bulelwa Mkutukana in the Phumlani informal settlement of East London in Eastern Cape, South Africa, Zahara was raised there with her parents Nokhaya and Mlamli Mkutukana, the sixth of seven children. Zahara started singing in her school's choir when she was six years old, becoming the lead singer there, and at the age of nine, she was asked to join the senior choir because of her strong voice. Her stage name means 'blooming flower' in Arabic. As a child, she was known by the nickname 'Spinach' after her love for vegetables.
Zahara started singing at the age of six. Unable to go to university due to lack of funds, she honed her guitar-playing and song-writing skills by herself; she never had any formal music lessons, always playing her guitar by ear.
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The talented, acoustic guitar player, songwriter, poet and singer was spotted in 2010 in East London by Thembinkosi Nciza, co-owner of TS Records. He immediately made arrangements to sign her and move her to Johannesburg. Her debut album Loliwe was released in August 2011 and sold out in 72 hours, reaching double platinum in South Africa and surpassing 100 000 sales in three weeks, thus becoming the fastest selling album in South African music history, after Brenda Fassie’s Memeza (1997). Zahara wrote most of her songs before she was signed by TS Records in August 2010. In her lifetime, Zahara achieved a lot financially. Her debut album Loliwe (2011) went platinum in 13 days and double platinum in just 17 days, selling over 100 000 copies. It catapulted the then 24-year-old to international stardom.
Zahara won nine music awards in her lifetime. During the 18th annual MTN South African music awards in 2012, she took home six awards: album of the year (Loliwe), special award: best selling album (Loliwe), newcomer of the year, female artist of the year, best collaboration (featuring George Munetsi for ‘Incwadi Encwane’) and best smooth urban music album. In addition, she received Metro FM music awards for song of the year and bestfemale singer. She also received the Channel O music video award 2012 for best video (Loliwe).
We are not certain whether Zahara knew anything about the financial results of her record sales since TS Records, her record company which simply paid her royalties was in charge. We also don’t know whether she knew enough about financial management which included the paying of income tax. She simply enjoyed her money to such an extent that she became addicted to alcohol and died from liver complications.
I have witnessed many situations in other countries where big artistes have gone into exile or have moved their money elsewhere to avoid paying income tax. ABBA, Julio Iglesias, the Beatles, U2 and dozens of other stars used the Netherlands to avoid paying taxes.
Juggling one’s accounts and business is a tricky endeavour.
It is no secret that U2, The Rolling Stones, and AC/DC all from the United Kingdom, have kept their music rights in the Netherlands. But does this also apply to other artistes who sold millions of records? Yes, it does! From crooner Julio Iglesias and synthpop band Eurythmics to opera singer Placido Domingo, singer Vaya Con Dios, and Taiwanese pop star Teresa Teng: they all used the Netherlands and Curaçao to evade tax, according to research by Follow the Money.
‘Where do you live?’ It seems like a simple question, but Greek synthesiser-virtuoso Vangelis refused to provide a straight answer in 2019 when a Los LAngeles Times journalist posed the question. ‘In Paris,’ he muttered, but only when he was not residing in London, Athens or elsewhere.
It can be dangerous for a superstar who has sold millions of records to tell people where they reside most of the time. Tax authorities read the papers, too. Just ask ABBA’s Björn Ulvaeus. He had a private limited company set up in the Netherlands and a public limited company in Curaçao, allegedly already in the mid-seventies.
When rich artistes die before they organise their finances, it becomes a burden for those who are left behind to manages their estates.
Jimi Hendrix’s father, Al Hendrix, was shocked to discover in 1993 that his former lawyer was trying to sell the rights to Jimi’s music for 30 million dollars. After Jimi’s death, Al had put the lawyer to work setting up an offshore structure for rights management with companies in Panama, the Netherlands, and the British Virgin Islands. The Dutch component in this offshore structure is the Licensing Office for Music Rights (Elber) Ltd. Father Al was completely unaware that he had ‘signed away’ these rights, he claimed. Microsoft founder and Hendrix fan Paul Allen assisted Al financially with the ensuing lawsuit.
‘For Dutch artistes, the tax authorities in the Netherlands tax their entire income, worldwide,’ said a service provider from this sector. ‘The Dutch tax authorities are nicer to foreign artistes than to Dutch ones,’ record label executive Willem van Kooten stated. "I can see why Afrojack emigrated. Stars from abroad are welcomed with open arms, because that is supposedly good for the lawyers and accountants at the Zuidas. Meanwhile, the tax authorities are chasing Dutch artistes out of the country. I think it is a disgrace."
Other facilitators are less talkative than Van Kooten. "I don’t remember; it was thirty years ago. You should call someone else," is the only thing wealthy George Nicolai would say when he was asked about his involvement with George Harrison’s Bob Marley Foundation and Ganga Publishing. Tony Izelaar, involved in Ulvaeus’ Curaçao company, said he prefers "not to talk about clients and client entities". "I take it that you understand my position."
The large number of British artists who have gone to the Netherlands, following in the footsteps of The Rolling Stones, is remarkable. Nowadays, the UK may be a tax haven for the rich, but in the 1970s, the tax climate was rough. High top rates and tax stacking meant that the tax burden sometimes even exceeded 100 per cent.
‘It was really bad in England in the seventies,’ remembers Van Kooten. ‘The first artistes left in the sixties. Songwriter Mitch Murray moved to Amsterdam for part of the year, so I bumped into him sometimes. He told me that he had left because his rate in England had risen to 110% due to tax stacking.’
The Stones faced arrears with the British tax authorities, partly due to a careless manager, and realised that they would not be able to cover these arrears by simply continuing to work as usual: the rates were simply too high. The band members were forced to move to the south of France, where they recorded the album: Exile on Main Street.
It is popular to assume that making money with art doesn’t always assure financial stability. Making money as an artist would require you to go beyond just selling your art.
We do not know whether Zahara had any knowledge about how to manage her finances. What we know for certain is that the South African Revenue Service is after her estate for unpaid taxes. We are certain that somehow it will be settled amicably with her family. She’d turn in her grave if she knew what was happening with SARS who are after her hard-earned wealth.
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