The quiet halls of the Karachi Stock Exchange are abuzz with speculation once again. As representatives of various brokerage concerns lobby FBR to redress collection methodologies for capital gains tax (CGT), speculation abounds that tax authorities may revert to the previously discarded capital value tax (CVT). Although tax authorities have kept mum on the matter, other stakeholders opine that the implementation of CGT has failed to meet its desired objectives of improving documentation and providing FBR with leads to unscrupulous individuals that evade taxes. Stakeholders are divided over the likely recourse, however it appears that there is general consensus that the introduction of CGT has dented equity markets. While it is easy to chide brokers for lobbying against taxation, it is also true that the countrys equity markets are in need of dire attention. Volumes at the exchange have dropped to multi-year lows and in the absence of new listings, privatisation of state entities coupled with gloom in international financial markets, it appears that investors will remain shy in the short run. Experts argue that CGT acts as a disincentive for prospective investors, especially individuals. "Make documentation easy. No individual investor wants to sift through twenty pages of forms to invest Rs20,000 in the market" remarked InvestCap head of research, Khurram Shehzad. At a recent encounter with media men, broker-chairman KSE Abid Ali Habib also highlighted the fact that many other sectors that are vying for the attention of investors in the country, including real estate and commodity markets, do not contend with similar regulations that mandate disclosure of personal information regarding potential investors. The application of CGT was arguably, the only concrete step taken by the government in response to calls for expanding the tax net. However, to date FBR has not reported any significant jump in the number of tax payers in the aftermath of CGT. Moreover, collections made by the tax authority under CGT are considerably lower than collections under the previous regime, which was also applicable on banks. Although brokers have been vociferously opposing this tax since before its implementation, it appears that their voices may actually be heard this time around. After all, wouldn the government want to revert to a tax regime that garnered more collections and attracted more volumes to local bourses? So if the brokers were to get their way, it is but natural that they would consider the move a victory for the capital markets, just as the government would certainly appreciate higher revenues. But improving the tax base appears an entirely separate matter; one that doesn seem to be on anyones priority list at the moment.