​DISPUTE BETWEEN ACCFIN AND KONSISE
This is a dispute created entirely by Konsise and has nothing to do with Accfin. Mark Silberman believes this conflict arose primarily because Accfin refused to sell their business to Konsise and they view Accfin as their major competitor and Tillman wants to get back at Accfin.

The ongoing dispute between Accfin Software and Konsise highlights critical ethical and legal questions in the South African tax compliance software market. Accfin, a longstanding innovator and respected leader in back-office and tax software solutions, has publicly called attention to concerning practices by its competitor, Konsise, particularly regarding misleading and disparaging advertising tactics.

Accfin's founder, Mark Silberman, in a detailed open letter, raised significant concerns about Konsise’s comparative advertising methods. According to Silberman, Konsise habitually publishes unsubstantiated and baseless claims about competitors, including Accfin and GreatSoft, without providing credible evidence or sources. This type of advertising not only misleads potential clients but also breaches ethical advertising standards and fair competition principles.

A particularly contentious issue was Konsise’s use of a disparaging cartoon aimed explicitly at discrediting Accfin and GreatSoft, a tactic Accfin labeled as defamatory and unethical. Such actions underscore a desperate attempt by Konsise to undermine competitors rather than compete transparently based on genuine product capabilities and customer satisfaction.
Further, Silberman alleges that Konsise’s approach directly violates a key clause of the South African Revenue Service’s (SARS) Independent Software Vendor (ISV) agreement. Clause 3.4.7 explicitly states:

"The Vendor shall not infringe or attempt to infringe on the intellectual property rights or proprietary rights of SARS or any third party, nor engage in any conduct that is misleading or deceptive or likely to mislead or deceive."

Despite these serious allegations, Konsise has notably failed to provide a direct and substantiated response to this critical accusation. Instead, Konsise issued a broad denial through a lawyers letter that avoided addressing the specific breaches cited by Accfin, raising further suspicion about their adherence to SARS contractual obligations. Konsise wanted us to take this matter to court. There has been a ruling against Tilman for harassment in his personal capacity before.

What's more the following are included in the terms and conditions.

THESE TERMS AND CONDITIONS ARE BINDING AND ENFORCEABLE AGAINST ALL INDEPENDENT SOFTWARE VENDORS (ISVs) WHOSE SYSTEMS INTERFACE WITH SARS SYSTEM OR ANY PART THEREOF (THE SARS e-FILING WEBSITE).
​
IF THE ISV DOES NOT AGREE TO THESE TERMS AND CONDITIONS IT MUST TERMINATE THE INTERFACE WITH AND/ OR DE-LINK YOUR SYSTEM FROM THE SARS e-FILING WEBSITE, AS FURTHER INTERFACE OR LINK WILL AUTOMATICALLY BIND THE ISV TO THESE TERMS AND CONDITIONS.

Accfin emphasizes that Konsise places itself in an existential situation if SARS decides to pursue the terms of the ISV contract. If it's got anything to do with me this will change. Should SARS enforce this contractual clause, Konsise’s license could face immediate termination, placing all its customers at severe operational risk. Such an event could significantly disrupt tax compliance operations, demonstrating a clear disregard by Konsise for the potential consequences its actions could have on clients. What leader in an industry would take such an existential risk for their company? It’s a gamble which could change at any time. And if known by potential customers, why would they invest.

SARS, however, has currently indicated that it prefers not to intervene directly in what they call a commercial dispute, leaving the compliance risk squarely with Konsise and its customers. This despite the fact that the ISV contract was originated by SARS for very important reasons. This incorrect position by SARS underscores the importance for businesses in the tax compliance sector to maintain rigorous ethical standards and ensure strict adherence to contractual obligations to safeguard both their reputations and the operational continuity of their clients. The point here is if one bends some rules what about all the other important rules. Can an ISV be trusted. Remember how the broken window policy changed things in New York. Now is the time to do the right thing. Unfortunately, SARS have enabled this situation which has brought the SARS ISV profession into disrepute.

In conclusion, Accfin’s stance calls for a return to integrity and factual accuracy in advertising practices within the tax software compliance industry. The emphasis remains firmly on transparent competition backed by verified facts, product innovation, and genuine customer value, areas where Accfin continues to lead decisively.

The major takeout from this is that a competitor cannot be a software analyst and analyse competitors' products especially the way Philip Tillman does it. For obvious reasons they cannot use this conduct to gain a place in the industry. Customers don't like it.
​Scroll down for the open letter to Mr Tillman

AI Taxman says:
Understanding Tax Verification in South Africa
In the realm of tax administration, verification is a crucial process employed by the South African Revenue Service (SARS) to ensure the accuracy and completeness of tax returns submitted by taxpayers. Although the term "verification" is not explicitly defined in the Tax Administration Act (TAA), it is a well-understood procedure within SARS's administrative framework.

What is Verification?
Verification is a process where SARS reviews the information provided in a taxpayer's return or declaration to confirm its accuracy. This involves comparing the submitted details against third-party data, financial records, and other relevant documentation. The purpose of verification is to ensure compliance with tax laws and to ascertain that the returns reflect the actual taxable income or obligations of the taxpayer.

The Verification Process
When a taxpayer is selected for verification, SARS will notify them and request specific documents to support the information declared in their tax return. The taxpayer is expected to submit these documents within a specified timeframe, typically through the SARS eFiling system. The verification process generally takes about 21 business days after the submission of the required documents, although this period can extend if additional information is needed.

Outcome of Verification
If SARS finds discrepancies during the verification, they may issue a revised assessment and, if necessary, impose penalties. Conversely, if no issues are identified, the verification is marked as complete, and any due refunds are processed. In some cases, if potential risks are detected, the case might be escalated to a more detailed audit.

Legal Framework
The legal basis for verification is provided under Section 40 of the TAA, which empowers SARS to select taxpayers for inspection, verification, or audit based on any consideration relevant to the proper administration of a tax Act. This selection can be random or based on a risk assessment.

Conclusion
Verification is a less intensive process than an audit but serves as a critical tool for SARS to ensure tax compliance. It involves a thorough review of the taxpayer's records to validate the accuracy of their tax declarations. Understanding the verification process and complying with SARS's requests can help taxpayers avoid potential penalties and ensure a smooth tax administration experience.

For more detailed guidance on the verification process, taxpayers can refer to resources provided by SARS through their official channels.

AI Taxman says:
Understanding Additional Returns Under Section 27(1) of the Tax Administration Act
In the context of South African tax administration, Section 27(1) of the Tax Administration Act (TAA) plays a pivotal role in ensuring compliance and accuracy in tax reporting. This section empowers a senior SARS (South African Revenue Service) official to request additional or more detailed returns from taxpayers. Here’s a closer look at what this entails and its implications for taxpayers.

What is Section 27(1)?
Section 27(1) of the TAA allows a senior SARS official to require a taxpayer to submit further or more detailed returns concerning any matter for which a return is required under sections 25 or 26 of the TAA. This provision is designed to ensure that SARS has sufficient information to verify compliance with tax obligations.

When Can SARS Invoke Section 27(1)?
The invocation of Section 27(1) is typically based on the need for additional information that is not adequately covered in the initial returns submitted by the taxpayer. This could be due to discrepancies, incomplete information, or the need for more detailed data to assess the taxpayer's compliance with tax laws.

Authority and Process
Only a senior SARS official can make such a request, ensuring that the decision to require additional returns is made at a high level within SARS. This requirement is in place to prevent unnecessary or arbitrary requests for additional information.

When a request is made under Section 27(1), the taxpayer is expected to comply by submitting the required information in the prescribed form and manner. The return must be a full and true account of the information requested.

Implications for Taxpayers
For taxpayers, receiving a request under Section 27(1) means they must prepare and submit the additional information within the timeframe specified by SARS. Failure to comply can lead to penalties or further scrutiny by SARS. However, taxpayers have the right to request proof that the request was made by a senior SARS official, as stipulated under Section 6(3) of the TAA.

Conclusion
Section 27(1) of the TAA is a critical tool for SARS to ensure that all necessary information is available to assess tax compliance accurately. While it places an additional burden on taxpayers to provide more detailed returns, it also includes safeguards to ensure that such requests are justified and made by authorized officials. Understanding this process can help taxpayers navigate their obligations and rights under South African tax law.
 
AI Taxman says:
Understanding When SARS Requests an Audit
In South Africa, the South African Revenue Service (SARS) conducts audits to ensure compliance with tax laws and verify the accuracy of tax returns submitted by taxpayers. An audit is a more detailed and comprehensive examination of a taxpayer's financial records compared to a standard verification process. Here’s an overview of when and how SARS initiates an audit.

What Triggers an Audit?
An audit is typically triggered when SARS identifies potential discrepancies or risks during the initial verification process. This could include inconsistencies in the information provided, complex financial affairs, or patterns of non-compliance. In some cases, audits are initiated based on risk assessments or random selection.

Notification of Audit
Once SARS decides to conduct an audit, they will issue a formal "Referral for Audit" letter to the taxpayer. This letter serves as an official notification that the taxpayer's case has been escalated from verification to audit. The notification will outline the scope of the audit and specify the documents required from the taxpayer.

Scope and Process of an Audit
The audit process involves a thorough examination of the taxpayer's financial records, statements, and other relevant documentation. SARS may review multiple years of tax returns and compare them with third-party data. The audit can include interviews with the taxpayer and, in some cases, field audits where SARS officials visit the taxpayer's premises.

Duration and Outcome
Audits generally take longer to complete than verifications due to their comprehensive nature. The duration can vary depending on the complexity of the case and the level of cooperation from the taxpayer. Upon completion, SARS will issue a final decision. If discrepancies are found, an Audit Findings Letter will be issued, followed by a revised assessment that may include penalties. If no issues are found, a Finalisation of Audit letter will be sent, closing the audit process.

Taxpayer Rights and Dispute Resolution
Taxpayers have the right to object to the findings of an audit if they disagree with the assessment or decision. This can be done through SARS’s dispute resolution process. It is crucial for taxpayers to be informed of their rights and the procedures involved in challenging audit outcomes.

Conclusion
SARS audits are a critical component of tax administration, ensuring that taxpayers comply with tax laws and that their declarations are accurate. Understanding the audit process, from notification to resolution, helps taxpayers prepare and respond effectively to SARS's inquiries. It also underscores the importance of maintaining accurate and comprehensive financial records.

AI Taxman says:
In a verification process by SARS, the taxpayer may be requested to provide various types of documentation to support the declarations made in their tax return. These documents can include:

1. Financial Statements: Detailed records of the taxpayer's financial activities.
2. Invoices: Proof of transactions and expenses claimed.
3. Contracts: Agreements that may affect tax liabilities or deductions.
4. Proof of Payments: Bank statements or receipts showing payments made or received.
5. Tax Invoices: Specific to VAT, these are required to substantiate input tax deductions.

The purpose of these documents is to ensure that the taxpayer is compliant with tax laws and that the submitted returns accurately reflect their taxable income or other obligations.
 
AI Taxman says:
In the case of an audit, the documentation requirements can be more extensive compared to a verification. An audit involves a thorough examination of the taxpayer's financial records to ensure compliance with tax laws. Here are some key differences and additional requirements during an audit:
1. Comprehensive Financial Records: Unlike verification, which may focus on specific documents, an audit may require a complete set of financial records, including ledgers, journals, and detailed transaction records over multiple years.
2. Supporting Documentation: This includes all documents that support the financial statements, such as contracts, agreements, and correspondence related to financial transactions.
3. Detailed Explanations: Taxpayers may be required to provide detailed explanations and justifications for certain transactions or accounting treatments.
4. Field Audits: In some cases, SARS may conduct field audits, which involve visiting the taxpayer's premises to inspect records and interview personnel.
5. Notification and Updates: SARS is required to keep the taxpayer informed throughout the audit process, including providing a notice of commencement and updates on the audit's progress【8:17†source】.
6. Legal and Procedural Compliance: The audit process is governed by specific legal and procedural requirements, including the need for SARS to provide reasons for any assessments or adjustments made as a result of the audit【8:16†source】.
These requirements ensure that the audit process is thorough and that taxpayers are given the opportunity to understand and respond to any findings or adjustments made by SARS.

AI Taxman says:
An example of what might be required under Section 27(1) of the Tax Administration Act could include a request for a more detailed breakdown of income and expenses reported in a taxpayer's income tax return. This could involve providing:
1. Detailed Income Statements: A more granular view of income sources, including any foreign income, dividends, or interest received.
2. Expense Reports: Detailed lists and explanations of business or personal expenses claimed, including supporting invoices and receipts.
3. Capital Gains Calculations: If applicable, detailed calculations and supporting documents for any capital gains or losses reported.
4. VAT Reconciliation: For VAT-registered entities, a detailed reconciliation of VAT returns with financial statements.
5. Third-party Confirmations: Statements or confirmations from third parties, such as banks or clients, to verify amounts reported.
These additional returns or documents help SARS ensure that the taxpayer's submissions are accurate and complete, allowing for a thorough assessment of tax liabilities.

Dear Valued Customers and Potential Clients,
At Accfin Software we pride ourselves on being a trusted name in the industry for many years. We have many clients who will attest to this. Over this time, we’ve built our reputation by being transparent about what we do and how we do it. Unfortunately, not all competitors operate with the same level of integrity, and misinformation about our products and services has become a recurring issue. This misinformation problem has  been going on for a long time.
We believe in letting our work speak for itself, but we also understand the importance of addressing misconceptions head-on. Our new approach is simple: we will not only continue to tell you what we offer but also highlight what our competitors don’t provide or can’t do.
For instance:

• Competitor A’s secretarial product has a systemic flaw—once a transaction is finalized, documents cannot be reprinted. This forces their clients to delete and redo their work, leading to inefficiencies and frustration. By contrast, our system allows you to reprint secretarial documents anytime and even revisit historical transactions with ease and print where necessary. Watch out for the this flaw before you sign.
• Competitor B claims that our interface is outdated because it doesn’t mimic a "windowy" design. The reality is quite the opposite: every screen in our software is a dashboard, giving you a comprehensive, real-time view of your entire client base, each client and where you stand with each client.  It’s functionality and efficiency that truly matter, not superficial aesthetics with windows all over the place.

This approach has proven effective. Competitor C capitulated in the face of our commitment to transparency and excellence. And this is just the beginning—there are many more areas where we stand apart, and we’ll continue to share these insights.
Thank you for your continued trust in us. Stay tuned as we continue to demonstrate why we remain the leader as the biggest independent back-office system provider..
Watch this space for much more
​

To Konsise
Dear Mr. Tillman,
PREAMBLE
Your software offerings are simply not good enough for the accounting profession. You lost one yesterday and you lost one today!
Currently you only have half of one module,  that you need. You lack the full range of necessary products that we have, and what you do have in half of a tax product is missing critical features. I would suggest a shoot out to see what you are missing and then maybe you will understand where you are in this market place!
The position that you find yourself in must really hurt, because with the sun-setting on the Caseware products you have a feeling of being left out while all the competitors in the accountants market are getting the sites transitioning from Caseware, but not to Konsise. You have missed the boat and its not coming back to fetch you!
UNDER YOUR LEADERSHIP
Under your leadership, Konsise has decided to take a dubious approach in its recent advertising campaigns. Apparently, your strategy for entering the accounting market involves defaming established competitors, lying about their features, instead of offering genuine value to your customers. Your excuse for this dubious marketing you have used under the guise of “standard marketing” are just not good enough and does not fit well in this market place bringing the ISV market place into disrepute.
You have broken advertising laws, breached your SARS ISV contract, which you know about—which takes your company into an existential area as SARS could and may cancel your ISV license with the click of a mouse. Of course this does not appear to bother you much because you carry on with the same nonsense. This is the sign of a desperate company!
You have used material from our website against our privacy policy to defame us with your false narrative lies. You should know that if you lie about your competitors, what lies are you telling your customers in order to get the sale and if they should learn about your behaviour what would your customers think!
Now, in your misguided attempt to penetrate the accountants' market, you resort to illegal comparative advertising—with incorrect comparisons and lies to fit your fake narrative. Your tactics are not just misleading; they are defamatory. You imply superiority without addressing the core functionalities accountants need. For instance, your website does not mention individual and trust tax return filings a clear indication that you don’t have that functionality. You are dead before you start in the accountants market.
YOUR OFFERINGS
Your company started with software that files VAT forms to SARS. Your website is full of self-congratulatory claims about your VAT system's integration with SARS. While this may seem impressive to those unfamiliar with the accounting profession, it's clear that a specialised VAT system is entirely unnecessary for the accounting profession as their clients do this work themselves. Any competent accounting software handles VAT calculations just fine, and SARS manages the VAT processing. So what does your system do better than any other system, loads the correspondence and determines compliance, not a chance! Vat processing is not big in the accountants market. I am sorry that you started on the wrong end.
Are you even aware of what accountants actually need, or is this just another corporate gimmick hastily repurposed for a market you barely understand?
Your high-priced solutions might fool corporate giants, but accountants need efficiency and precision and the ability to handle their clients in bulk.
YOUR ATTEMPT TO BUY ACCFIN
When you approached me with the intention of buying Accfin Software, you boasted about the money you made from corporate company's. Your style and ethos were far from what we value at Accfin, which is why I declined your attempt. Perhaps I should have been clearer: the accounting market is not impressed by unnecessary, overpriced systems which actuality don’t do much and guess what - the firms that have seen your system say, exactly the same thing. After we declined you started with your nonsense on the web and sending out defamatory emails, I wonder why!
FEATURES
There are critical areas for accounting professionals. Can your system even handle IT3Ts or IT3Ds or a Fica system, a must for secretarial practices which is a major requirement for accounting firms?
I was astounded to see your promotional video on company tax returns, featuring a wizard system. Professionals do not need hand-holding; they need speed and efficiency. Our one-screen approach outpaces your convoluted wizard system by a mile and works perfectly well, why should we change a system that works.
And where is your company secretarial system? Every company tax return now requires detailed shareholder information. Do you have this. Your attempt to develop one in a few months is ridiculous. This oversight further highlights your lack of understanding of the accounting profession's needs. Our Sky software can also generate organograms to an unlimited level, both ways and track and control beneficial ownership. Where is your system!
Oh yes there is a lot more! Let's talk about some additional critical features that your tax system sorely lacks. An accounting system needs to handle bulk email communications to clients efficiently (something not needed in a corporate environment as its mostly under one roof. With our integrated digital signature system, practitioners can automatically confirm their filings protecting them against risk. Imagine Filing all zero provisional tax returns with one click? We've got that covered too. Our user-definable filter system lets accountants create lists and processes in any way they want. E.g below a million, more than a million and groups together. You will be surprised at what we can do!
Accounting firms need to process tasks in bulk. Can your system generate 1,000 invoices in less than three minutes? Oh, and by the way, we have a full time recording system that manages an accounting firm’s biggest assets: work in progress and debtors. Where is yours!
We should also point out that we have not even mentioned a fraction of our features in this open letter.
Dear Mr Tillman, so you think it's just about a simple VAT system and some correspondence from SARS? It’s not! It’s about a comprehensive integrated back-office system for accountants that takes years to develop not 5 minutes. Why don’t you stick to your knitting and consider the predicament you have got your customers into. A SARs censure or even cancellation of your ISV licence would put you in a predicament.
CONCLUSION
Maybe in three years’ time, you’ll be where we are now if you are given the opportunity to continue. I wonder where we will be by then, the way we going we may even own the market place and maybe you'll have your compliance robot working by then with some of your ridiculous requests you made to SARS.
Mr. Tillman, your approach is not just flawed—it is laughably inadequate. Misleading advertising and defamation are not acceptable business practices. It is time you reconsider your tactics and align them with the ethical standards expected in our industry and in South Africa.
Accfin Software will continue to serve the accounting profession with integrity, offering solutions that are genuinely useful and efficient. I suggest you take a moment to reflect on the damage your current path may cause and make the necessary changes to your approach.
Sincerely,
Mark Silberman
PS
Currently, Konsise is in clear violation of clause 3.4.7 of the Independent Software Vendor Systems Interface Terms and Conditions" agreement which explicitly prohibits any infringement upon the intellectual property rights of SARS, its suppliers, or any other third parties. Konsise have broken this provision multiple times which in terms of clause 12.1 gives SARS the right to terminate the Konsise licence in an instant.
I wonder what Konsise's customers would say to this!

In the current global landscape, trust between entities is scarce, and this sentiment extends to the dynamic between accounting firms and software vendors. A significant investment in a software vendor by an accounting firm places considerable control in the hands of the vendor, with the firm's operational smoothness, client service, and regulatory compliance hanging in the balance. This situation is further complicated in South Africa, which is experiencing a notable degree of governmental transition.

The governance and management structure of software vendors catering to accounting firms warrant close scrutiny. The question arises whether the local management of these vendors retains adequate control, or if the overarching strategies are dictated by a distant board of directors, possibly detached from the nuanced needs of the local market and businesses.

The situation with Caseware, a prominent player in this field, underscores the potential pitfalls. As part of a large international conglomerate, Caseware's top management seemingly lacked alignment with the local user base's interests, leading to significant operational and compliance failures. The debacle with Caseware has exposed the risks of inadequate local oversight and the failure to meet the specific compliance and operational demands within South Africa.

Caseware's attempt to retain its clientele for other offerings, such as time management and working papers software, raises questions about the firm's reliability and the prudence of continuing reliance on its products. The market upheaval caused by its earlier failures prompts a reevaluation of whether firms should maintain their engagement with Caseware until June 2025 or seek alternatives sooner.

Accounting firms finding themselves in this quandary should consider other independent software vendors. However, caution is advised, as transitioning to a new vendor could lead to similar challenges if not managed with thorough due diligence and an understanding of the vendor's ability to meet specific local requirements.

In conclusion, the selection of a software vendor in the accounting sector is a decision of critical strategic importance, necessitating a careful assessment of the vendor's management structure, local operational control, and alignment with the firm's specific needs and compliance obligations.

As custodians of a profession that has withstood the test of hundreds of years, accountants have consistently adapted to technological advancements to meet evolving compliance demands. The question now is whether we have truly transformed to fulfill the multifaceted requirements of various regulatory bodies.
 
In the context of a medium to large tax practice, the traditional separation between company taxation functions, secretarial functions, trust administration functions and other regulatory functions is becoming increasingly impractical, time consuming and not cost effective. The necessity for shared data across these disciplines is now more pronounced than ever, highlighting the need for integrated technological solutions where data can be shared across all the functions.
 
Key Reasons for Integrated Data Sharing:
 
Tax and Secretarial Data Integration: The completion of corporate tax documents, like the ITR14, now necessitates access to extensive shareholder information which can be changing at any time. An integrated data system ensures that this data is readily available and accurate, streamlining the process and mitigating errors.
 
Trust Administration Efficiency: Trust tax returns require detailed information about all participants, entities and individuals involved, necessitating a system where data such as IDs and tax numbers are easily accessible and reliably maintained.
 
Regulatory Compliance: For accountable institutions, the complexity of FICA compliance has increased, necessitating robust data management to meet regulatory standards efficiently. All the data is based on the various disciplines run in the office.
 
Beyond these necessities, an integrated data set enables us to:
 
Produce a BO Organogram for the CIPC: Demonstrating the ownership and control structures required by regulators becomes straightforward with integrated data systems, ensuring compliance with the CIPC’s stringent requirements. What’s more where a shareholder changes it’s a simple matter of re-generating the Organogram.
 
Sky Software offers the most integrated data system in RSA that will allow compliance with all the regulators.

 RESPONSE TO THE COMMISSIONERS LETTER - WE HAVE NO RESPONSE
 
Dear Commissioner,
 
Thank you for your prompt response dated 03 October 2023 regarding our concerns on beneficial ownership.
 
We appreciate the CIPC's commitment to the development of a beneficial ownership register and its alignment with the FATF requirements. We understand the importance of this initiative in the fight against money laundering and the financing of terror activities. To this end, we have made a study of beneficial ownership according to FATF as well as all your guidelines.
 
However, our primary concern still remains the clarity and consistency of the guidance provided by the CIPC. While we acknowledge the efforts made by the CIPC in publishing guidance notices, FAQs, and hosting webinars, we believe there is a need for more specific and detailed guidance on certain aspects of the legislation.
 
You mention that the CIPC cannot and should not provide legal advice in terms of beneficial ownership structures. We'd like to draw your attention to Section 188(2) of the Companies Act, where the CIPC is mandated to provide explanatory notices outlining its procedures, or a non-binding opinion on any provision in the act, or apply to court for a declaratory order. Given this mandate, we believe it's within the CIPC's purview to offer clearer guidance on the matter, and we expect you to do so.
 
However, if the current stance persists, we'll be compelled to inform stakeholders that, without definitive guidance, it's unfeasible to accurately produce the securities register, with the inclusion of beneficial owners. Given the potential enforcement implications, we earnestly request clear and actionable answers.
 
If indeed you do not know the answer, there is no reason why you cannot say so. On each and every attempt that we have tried to engage, you have failed to answer, causing a huge amount of wasted time and unhappiness.
 
Prescribed Requirements: You mentioned that the CIPC is working with other regulators to develop the prescribed requirements as provided for in Section 50(3A)(b). Please indicate who the other regulators are so that we can have a better understanding of what is happening. We have no problem in engaging with anyone in order to resolve the impasse. We would appreciate a tentative timeline for when these requirements will be finalized and made available to stakeholders.
 
Companies Act Regulations: While we note the guidance provided in Regulations 30 and 32, we believe there are still ambiguities that need to be addressed, especially in the context of practical implementation as no guidance is given.
 
Information Sharing: We understand that there is no conflict in the Act regarding information sharing. However, we would appreciate further clarity on the conditions under which beneficial ownership information will be shared with law enforcement agencies and other regulatory authorities.
 
Webinars and Guidance: While we value the webinars and guidance provided by the CIPC, we believe there is room for improvement in terms of the depth and specificity of the content. We would also appreciate more interactive sessions where stakeholders can raise questions and receive direct answers and not be fobbed off.
 
CIPC Beneficial Ownership Register: We commend the CIPC's efforts in enhancing the Beneficial Ownership Register. However, we would like to know more about the upcoming enhancements and how they will simplify the filing process for corporate entities. In the light that we are all in the digital age, we would like to know when there will be engagement in updating the securities register and the BO register electronically from secretarial practitioners' systems, making the whole process easier.
 
In conclusion, our primary objective remains to ensure that our stakeholders are well-informed and compliant with the legislation. We believe that with clearer and more detailed guidance from the CIPC, this objective can be achieved more efficiently.
 
We look forward to continued collaboration with the CIPC and hope that our concerns will be addressed in future communications and guidance materials.
 
Best regards,
 
Mark Silberman
Mark Silberman B.Acc. C.A.(SA)
Director of Accfin Software

Dear Commissioner and Others reflected in the email

I hope this email finds you well. I represent a significant number of stakeholders who utilize
our company's software in their secretarial departments. Additionally, attendees of our
webinars also look to us for guidance. Collectively, this encompasses thousands of
companies.

As stakeholders' our primary concern is that our regulators might proceed with the methods
they've established, and in a span of three years, the FATF could potentially downgrade us.
As stakeholders, we believe it's our duty to ensure that such an outcome is averted.
There are a number of important issues relating to standard operating procedures which
have been presented in the CIPC FAQs and webinars that appear inconsistent with the
Companies Act and secretarial practice. It is our intention to address each one over time. In
this communication, we will begin with Section 50 (3A) of the Companies Act.

In today's environment, it is inconceivable that there exists such a divide between the laws
set to be implemented and the actual practice on the ground. The Companies Act
commission, along with other regulatory bodies involved, must be held accountable for
allowing these inconsistencies to persist. Such discrepancies are costing our nation
countless hours, translating to millions of wasted man-hours, which is detrimental to our
productivity and efficiency.

I am writing to seek clarification on certain aspects of this section, specifically regarding the
documentation and disclosure of beneficial owners in the securities register.

1. Section 50 (3A) of the Companies Act Modifications:
o We understand that companies not classified as "affected companies" are
mandated to document specific details about the natural persons who are
the beneficial owners in their securities register.
o This documentation should adhere to the prescribed format, and companies
are responsible for ensuring timely updates to beneficial ownership.

2. Integration of Beneficial Owners (BOs) into Securities Register:
o The process of determining BOs can be intricate, especially when
shareholders are entities like other corporations or trusts. This necessitates a
comprehensive analysis to identify the ultimate individual beneficial owner.
We've observed that deriving BOs from a securities register might require an
organizational chart, like an organogram, to delineate the progression from
the shareholders listed in the securities register to the BOs.

3. Ambiguity in the Act:
o While the securities register is publicly accessible, the original directive from
the CIPC FAQs suggests that the Registers of Beneficial Owners are intended
solely for governmental regulatory purposes.

4. Filing Formats:
o As per the current mandate, are we still required to file a separate BO
Register in a data format and a Securities Register in a PDF format?

5. CIPC Webinar Query:
o In a recent CIPC webinar, when a question was raised regarding Section 50
(3A) of the Companies Act and its implications, the presenter's response was
to "refer to the legislation" without providing a direct answer or clarification.
We would appreciate further insight into this specific legislative provision and
its interpretation.

6. Request for Policy Statement:
o In light of the aforementioned concerns and ambiguities, we kindly request
the CIPC to issue a clear and comprehensive policy statement on this matter
to provide guidance and clarity for all stakeholders involved.

There has been a noticeable tendency for the CIPC not to engage promptly or at all. This
approach is contradictory to your mandate, especially concerning the introduction of
enforcement compliance penalties.

Your prompt response and guidance on this matter would be greatly appreciated. Surely,
the CIPC was aware of the impending legislative changes in the Companies Act when
formulating their FAQs. In light of this, we kindly urge the CIPC to align the FAQs with the
stated policy to ensure consistency and clarity for all stakeholders.

Our primary objective is to streamline processes, ensuring they are both efficient and cost-
effective, while fully aligning with legislative standards. This communication serves as an
indication of our future engagements, and we sincerely hope to remain involved and not be
excluded from the ongoing processes.

Warm regards,
Mark

This is a letter I received from the chief legal officer of the the CIPC. My response to the letter received is Red. I never received a response.

Mark Silberman
Accfin Software
Companies and Intellectual
Property Commission
E-mail: [email protected]

Dear Sir

RE: BENEFICIAL OWNERSHIP
a member of the dtic group
There is the question of what needs to be uploaded – registers and documents and how to deal
with the data. If the CIPC obtains the data properly every BO link in RSA other than affected
companies will be established. It is my belief that the CIPC has the best chance of getting this
right.
So why would they not do it correctly

DIGITISATION
Digital transformation is a necessity. Not a good-to-have, not a nice-to-have, but an imperative
if you are going to keep up and win against the criminals.
T. Raja Kumar, FATF President (2022-2024) at the FATF Conference on Digitalisation, June 2022.

We refer to the abovementioned matter and in particular, your e-mail correspondence dated
11 July 2023 with attached “draft article”, the content of which was noted.
The CIPC felt it necessary to respond due to factual inaccuracies within the document provided
and to clarify any ambiguities that may exist. The General Laws Amendment Act, 2 of 2022
amended four key pieces of legislation, namely:-
• Trust Property Control Act, 1988;
• Non-profit Organisations Act, 1997;
• Financial Intelligence Centre Act, 2001; and
• Companies Act, 2008.

Each of these pieces of legislation was amended to provide for beneficial ownership
registers to be created and the requisite information submitted in terms of these registers
applicable to the type of legal persons. The Regulatory bodies in terms of each of these legislationswere also provided with a mandate to collect beneficial ownership information (applicable to
each Regulator) and to enforce compliance with the requirements. It is inconceivable and
impractical to expect one Regulator to collect all beneficial ownership information in terms of
juristic persons not administered by that Regulator in terms of their main legislation. The preamble of
GLAA, 22 of 2022 explains it very clearly in each instance.

I am familiar with each of these pieces of legislations, however the purpose of my response
is to deal with the CIPC as they have the best chance of succeeding.

Certain requirements for beneficial ownership transparency, were set down by the
Financial Action Task Force (FATF) in their Mutual Evaluation Report of South Africa, and
the beneficial ownership register of each respective Regulator in the area that they are
responsible for, was developed and continues to be enhanced to conform to the FATF
requirements.

Agreed.

The Department of Trade, Industry and Competition as well as the CIPC is committed to comply
with the requirements in terms of beneficial ownership, in line with the mandate provided for in
the legislation to establish and maintain a beneficial ownership register in terms of corporate
entities regulated by the CIPC.

I agree with this and that’s what my concerns are about as my document deals only with
corporate entities.
My draft document deals with the situation at the CIPC only as I am most concerned with the situation
there.

First of all if you say there are factual inaccuracies, however you neglect to say what they are.
Please state what the factual inaccuracies are.
My document was based on what I heard at your webinar for the first time contrary to what has been
said before and contrary to the messaging we have heard. Based on this there is a problem with the
CIPC messaging! Nowhere in your documentation prior to the webinar have we heard of the two items I
mention below that you mentioned in the webinar presented. I have now seen the new guidance note
on the situation where the BO register and data do not need to be filed where it is not required. There is
still no official guidance on where it is not necessary to file a BO register and data other than an
affected company. To say that the data is contained in the Securities register and is known info defeats
the whole purpose of what FATF are trying to do.
At this stage I am only concerned as to what should be filed at the CIPC and not other regulators. If the
CIPC does this properly then it will have a huge impact on the grey listing requirements of the FATF.
There are 2 aspects that must be addressed as follows which you have not addressed;-

1. Loading data which in our view is essential for the CIPC to provide data to regulators which is
meaningful and to be cognizant of the links between Beneficial Owners and all other interests of the
beneficial owner. An individual BO in one small company may very well be the missing link across all
his or her BO interests which will not be seen if the data is not filed in an electronic format. By not
doing this the CIPC is missing the most important opportunity. After sending this document I will give
an example of what is missing if the data is not loaded in all other non-affected cases.

2. Loading Registers - we see this as two separate registers. The normal securities register which will also
include those shareholders who have a beneficial interest in shares and a 2nd register which will
include beneficial owners only to be used by regulators only.
Registers without building the data wont be helpful at all.

We are cognisant of the fact that beneficial ownership declaration structures may be very
complex and cross-cutting over various data platforms (CIPC, DOJ, FIC, SARS, etc.) and steps
have already been taken to put data-sharing agreements in place.

I agree with this, however my issue raised was with trusts and the fact that you did not answer
the question which I will restate here. So if one drills down from a company and one of the
shareholders is a trust, how do we indicate the beneficial owner. Do we insert the trust name or
do we leave it blank so that there is no trail to the actual real BOs. Please answer this.

In your “draft article” mention was made of simple company structures and reference
during the webinars presented made of “known information”. Known information refers to
legal ownership information (shareholders, registered owners of property, etc.) and this is
information which can be obtained, is available – in other words known. The whole purpose
of beneficial ownership transparency is to assist law enforcement agencies to be able to access information, which up to now in many areas, has not been
transparent and available. To clarify further, the legislation and subsequent amended Companies Act
Regulations, clearly indicate that companies (that do not fall within the definition of an “affected
company”) must include in its securities register “a record of each beneficial owner of the company” and
further lists the minimum information of the beneficial owners required.

I accept this principle, but you certainly cannot put BOs in the securities register as this is not for public
consumption as the CIPC has stated. However, sometimes the true beneficial owners are far removed from
what is contained in the securities register and in this case a 2nd BO register only must be uploaded (as I
have already mentioned above) and if one looks at the two registers there could be no comparisonbetween them and the only way to get from the Securities register to the BO register is by organogram and
this you have to do by drilling down through the entities and trusts.

Corporate entities are invited to provide as much information on beneficial owners as possible, but at the
same time practicality and best practice must be taken into account. Right now its to early to get to a best
practice. Its companies like us and secretarial practices that eventually create the best practice and this is
why there needs to be engagement because it is the stakeholders that have to comply. There is no question
that stakeholders want to do the right thing and want to know that what they are doing has an effect.
In terms of simple beneficial ownership structures, it may be simple to provide data on each beneficial
owner through submission on the CIPC BO-Register, whilst such companies are still required to submit a
securities register (with the BO information contained therein).

The highlighted part above is clearly wrong and contrary to what has been said in the CIPC messaging.
However the BO details should be entered into the self-contained BO database, surely? We have been told
that the BO data is not to be made available to the public only the regulators so what you are proposing
defeats the object of the exercise. Your webinar dealt with Known Information and the fact that you did not
have to enter the shareholders in the BO database because they were on the securities register which is
uploaded as a PDF file, is totally wrong and does not make sense!

With more complicated ownership structures it may not be practical to submit beneficial ownership
information on the Register and it makes more sense to source the information / data from the mandatory
securities registers and beneficial interest registers, that must be uploaded.

I agree this may be the case and to insert the BO information on the securities register which the CIPC will
allow the public to look at is wrong and that is why there should be a separate BO register. Nevertheless a
BO register without entering the data is in fact useless as how will it be used by other regulators. I do not see
the way through converting all the information from a PDF file.
I do not agree with the fact that its too complicated as there are principles involved and one can set rules
to get to the end result!

Another area of concern mentioned was the distribution of percentage of beneficial ownership and the
difficulty to indicate same, specifically in terms of Trusts. Again, the legislation is very clear that beneficial
ownership does not only include percentage requirements, such as in terms of shareholding, voting
interests, etc. but that the exercise of control and/or ability to materially influence the management of a
company, is also considered beneficial ownership. As mentioned earlier in this correspondence the system
is being continuously enhanced to provide for every possible contingency, including beneficial ownership
types which are not measurable in percentages.

I agree with some of this, nevertheless trusts who complete the BO registers should have a good idea about
percentage interests as they should be cognisant of what is in the trust instrument and agreements and
who controls who. Simply by missing this step the CIPC is missing out on what all this is about, because we
are told over and over again that the issues are with trusts. Accounting officers and trustees must determine
the percentage factor as who else is going to do that. When it comes to voting only the percentage interest
counts. The triangulation with the masters data or anyone else’s for that matter is not going to work. The level
of faith that stakeholders will have in triangulation is nil.

What we are proposing is a starting point for query or audit if the need arises and establishes the link in order
to get to the warm bodies. If we don’t do this calculation how will we ever get to the warm body. Its best to
put in a percentage even if the percentage is even among beneficiaries so that links can be establish and
we reach a warm body.

There are many instances in secretarial practice which are not legislated and every one knows what the
practice is. This would be a simple matter for the CIPC or the minister to issue a regulation or guidance note.

For clarity, we also suggest you have a look at the definition of beneficial owner, indicated in each piece
of legislation amended by the GLAA, because the definition differs, depending on which juristic person
type it applies to.

I have done this and my views have not changed as in the case here I am dealing with the CIPC
We, reiterate that the CIPC is continuously enhancing the established CIPC Beneficial Ownership Register to
simplify filing of beneficial ownership information for corporate entities, as much as possible. Webinars,
guidance notices, user guidelines and articles on the subject of beneficial ownership, are all tools used by the
CIPC to assist corporate entities in meeting their compliance objectives in terms of beneficial ownership.
The webinar that I attended indicated a totally different view of what we should be doing and I don’t accept
that it provides clarity.
We trust the above provides some clarity.
Definitely not! If the CIPCs views have not changed then I expect a full engagement with all the role-
players.
Yours’ sincerely
Lucinda Steenkamp
Senior Legal Advisor: CIPCDeputy Information Officer: PAIA and POPIA
14/07/2023

As a rule we don’t take issue with anyone or a  competitor unless they take issue with us. Over the last 15 years we have never had an issue with anyone! So why do I have to waste my time writing an answer to a blog I came across on the Konsise website (who in fact are not competitive to Sky Tax) that I have to object to.
www.konsise.com/business-tax-software-south-africa-2023/

I came across a blog article written by Konsise called the 5 best tax management systems in RSA.
I wrote to the company and asked them to remove the article on their website as I consider it disparaging. In fact I find the whole article wrong and factually incorrect.
First of all we should not be viewed as a competitor with Konsise as our products are not competitive and are designed for totally different target markets with very different price strategies, Konsise being for the in house tax departments of large corporates and our product being for the tax practitioners accountants market.

I would like to state that I am in no way disparaging the product Konsise as I am not in a position to do so. However based on their website and marketing material there are many features they don’t have that the tax professional market products do have.

A simple question do they file individual tax returns and trusts or companies and do provisional tax filing?
_____________________________________________________________________________
Dear Management of Konsise
I note with disdain that you have mentioned our product Sky Tax in an article on your website.
https://konsise.com/5-best-business-tax-software-in-south-africa-2022/#11-accfin-
If you are going to mention us please ensure that you get your facts right. Your facts are wrong and disparaging.
 I respectfully request that you remove our name from that article immediately, or better still the whole article as you are not qualified to put out that content.
Regards
Mark
_____________________________________________________________________________
This is the response received from the MD
Dear Mark
Lovely to hear from you, I hope you are enjoying the December holiday period.
Our articles are written using a journalist who accesses publicly available information and customer feedback.  Having reconciled, it is nearly identical to information sky tax writes about is own products.
You have failed to specify any inaccuracies in the blog post, or what might be disparaging. In fact, the article is generally complimentary of sky tax, we omitted many of the negative customer comments as that isn’t the purpose of such an article.
We won’t remove the article but shall correct anything that meets the objective standard of highly inaccurate and/or defamatory statements. Unless you provide greater specificity, I cannot act on such generality. 
We shall publish many industry related articles and you are always welcome to point out any inaccuracies that may creep in. 
Warm regards
Philip
_________________________________________________________________________________
My Response to  Philip Tilman to sentence listed below
“Our articles are written using a journalist who accesses publicly available information and customer feedback.  Having reconciled, it is nearly identical to information sky tax writes about is own products. “

My Response
If the above sentence is correct this Konsise response is nonsense!
If this was written by a journalist, surely a journalist would make sure they would  get their facts right and would be very happy to publish their name with what they have written. The article is full of generalised statements which I doubt a journalist would say. E.g  the basic user interface is lacking. We would like to take this up with the journalist concerned to query where they got their information from and which part of our writings they reconciled with. It should be noted that there are many features that are not on our website.

It is my view that this was written by a sales person and not a journalist who has no understanding of the market place comparing apples with oranges which is really not possible.

What makes this even worse is the fact that the management of Konsise who allowed this article to be published, clearly do not understand the market place. There is no way that Konsise and the products aimed at the professional tax product can be compared, so why compare? Also why include an accounting product like SAGE in a tax review as this is ridiculous.

So the reason is that they did this to show that they are the best in tax management where clearly they are not and are not in the market for tax professionals but want to be viewed as the best in this category.

“Having reconciled, it is nearly identical to information sky tax writes about is own products.”
Note the word “nearly”. So the assumption is that your journalist went through every webinar and marketing video and text to reconcile the article to what Accfin said, I think not!

Let me point out that if I did a review of anyone’s product I would have the good manners and ethics and send it to the company concerned first to insure that my facts are correct to make sure I would never get myself into the situation that Konsise has got into. Konsise did not bother to do that! However I would not review anyone’s product because I would never be able to get all the facts.

The Sky Software picture Published  in the Konsise blog
One of the most ridiculous aspects of this review is that Konsise published a picture of a debtors screen from 2014 for a tax product review in 2022. Surely a journalist would know better. Now come on how is this possible in a tax product review!

Mistake
To be clear Konsise is a product that is geared for corporate groups with a price that is far beyond the other products mentioned in the group and beyond what the professional tax practitioners can pay. Owing to this simple fact Konsise is not suitable at all for accounting firms that are tax practitioners.

Mistake
Sage is a fantastic accounting system and is not a tax management system at all so why include it in this so called review.

Mistake
The review fails to mention the fact that Accfin and Greatsoft not only supply Tax Management systems but supply full back-office systems for the whole accounting firm which makes them not comparable to Konsise. Why not mention this?

Mistake
The Konsise product is  not built for tax professionals as it does not have the features of Greatsoft and Accfin.

Sentence from MD Philip Tilman Email
“You have failed to specify any inaccuracies in the blog post, or what might be disparaging. In fact, the article is generally complimentary of sky tax, we omitted many of the negative customer comments as that isn’t the purpose of such an article.”
My Response
The article is not complimentary, it is disparaging because of the generalities and the lies and the fact that the mere comparison is wrong. Disclose the negative customer comments you received so that we can verify. Who got the negative customer compliments, your sales person or the journalist.

THE CONS IN KONSISE BLOG
·              Geared towards tax professionals, so Sky Tax is missing some features in-house finance teams would appreciate and expect such as peer reviews and deadline alerts
·              Basic user interface, lacking some essential features for corporates
No free trial

MY RESPONSE
How does the writer know that there is no peer reviews and alerts. This is factually incorrect. Where did they get this information from!
What does the writer mean by Basic User Interface and what are the features lacking.
In regard to No free trial our user base and our users speak for themselves and owing to the sophistication of our product unfortunately free trials are not possible.
Check out some of our positive user comments on the link below.
https://www.accfinsoftware.com/case-studies.html
 
BOTTOM LINE IN THE KONSISE ARTICLE
Provides some useful features but lacks some of the features a business needs to properly manage the complexities and volume of corporate tax.

MY RESPONSE
Rubbish

Philip I await your response!