LSE decries CVT levy

The governing board of directors of the Lahore Stock Exchange (LSE) will decide on Monday its future course of action against the levy of 0.1 percent capital value tax (CVT) on shares trading.
It was resolved in an emergency meeting of the members and brokers held at the LSE Auditorium on Sunday afternoon to review the implications of the CVT levied on shares transactions in the Federal Budget 2004-05, and decide its future line of action in this regard.
The meeting, which was presided over by LSE Chairman Syed Asim Zafar lasted for three hours. A large number of LSE members, brokers and former LSE chiefs attended the meeting.
The participants debated the issue of the CVT in detail, but failed to reach any conclusion. The majority of LSE members supported the idea that the market should be kept closed from Monday onwards till withdrawal of the CVT.
Only a few members opposed the idea on the plea that closure of the market will cause huge losses to brokers and investors, and a May 2000-like crisis may erupt again, if the market opens on Monday, it will crash, viewed a majority of members.
A member said that brokers were already paying taxes under various heads, therefore, this new tax (CVT) will put additional burden on them.
The meeting was in progress when the chair, Syed Asim Zafar, received a telephone call from the Karachi Stock Exchange that Finance Minister Shaukat Aziz had given time for a meeting with the representatives of bourses to discuss the issue on Sunday night.
He announced that people from three bourses will attend the meeting, that will take place in Islamabad at 9:00 pm.
"Now I am leaving for Islamabad to attend the meeting with the finance minister, and hope that the issue will be settled down smoothly and the need to close the market will not arise", Syed Asim Zafar told Business Recorder after the meeting.
Meanwhile, he said the LSE board would meet on Monday (today) at 8 am to decide whether the market should be closed or not. The decision of the board meeting will depend on the outcome of the meeting of the finance minister with the representatives of the bourses, he pointed out.
He, however, expressed the hope that the meeting with Finance Minister Shaukat Aziz will prove fruitful.