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Two-and-a-half months before the Rabinovitch Committee's tax reforms arrive, the capital market has more questions than answers.

Hundreds of portfolio managers, bankers, brokers and investors packed the Tel Aviv Stock Exchange's new visitors center early this week for a talk by income tax officials on how the reforms will operate. However, the listeners left the symposium more confused than they entered. Two months after the Rabinovitch Committee published its recommendations, many problems raised by the market have yet to be solved.

The issue of taxing derivatives is still cloudy, and tax commission officials do not have any answers on the taxation of financial instruments. The issue of mutual funds is unclear.

The banks who will bear responsibility for collecting taxes from their customers have yet to get specifications on how the system will work. The income tax commission itself does not seem to be aware of all the problems and with only 80 days to lift-off, the market stands in waiting.

During the last few months, convention centers at Tel Aviv's top hotels have been busy hosting accountants and tax advisors for symposia that discuss the principles of the reforms. The address ways for those who have the means to pay the lowest possible taxes, but not one of the symposia dealt with specific instructions for executing of the measures.

What will an investment consultant at a bank say when a client asks about the difference between tax on dollar options and tax on dollar deposits?

Surely such a highly complex tax reform that will affect so many, deserves more serious preparation and time for the market to study it. The situation can be compared to a battle order that has been made clear to the generals, but has left the foot soldiers out of the picture.

The honorable members of the Rabinovitch Committee, income tax commission officials and treasury clerks will understand every detail of the reform by the end of the year, but on January 1, 2003 those in the field will find themselves at a loss for words when faced by investors.

If the income tax commission does not come up with answers soon there will be no choice but to demand that the reforms be postponed for a few months. There is no rush. What is imperative is that the chaos and uncertainty about the reforms that are afflicting the market should be cleared up before the measures are actually implemented.