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(1)Exempting tax could avoid double taxation, boost tradingHong Kong market is striving to reverse sluggish trading, IPOsBy Bloomberg News(Bloomberg)--

China is considering a proposal to exempt individual investors from paying dividend taxes on Hong Kong stocks bought viaStockConnect, according to people with knowledge of the matter.Regulators including China Securities RegulatoryCommissionand the State Taxation Administration are reviewing a plan submitted by Hong Kong to waive the 20% tax on dividends from Hong Kong stocks bought via the link that connects to Shanghai and Shenzhen, the people said, asking not to be named discussing private information.

The proposal aims to avoid double taxation and align fairer arrangements for investors both in Hong Kong and China, the people added. Hong Kong has no tax on dividends.A final decision is still pending and there’s no definite time line to implement, the people said.

The proposal comes as Hong Kong strives to revive its market after a prolonged downturn ininitial public offeringsand trading volumes. Still activity has picked up recently after the CSRC last month issued a series of supportive measures, including expanding the scope of the Stock Connect.A Hong Kong stock exchange spokesperson and the city’sSecurities and Futures Commissiondeclined to comment. The CSRC wasn’t immediately available to comment.

“Southbound flows already account for around 15% of turnover in Hong Kong, and may rise once this is implemented.”Chinese names with the highest dividend yield included China Construction Bank Corp,