This undated photo shows the Inland Revenue Department at Wan Chai, Hong Kong. (ROY LIU / CHINA DAILY)

Hong Kong Institute of Certified Public Accountants on Thursday proposed a series of measures to boost the city’s international appeal and competitiveness as it steps up efforts to revive the economy and retain its global standing following the relaxation of anti-pandemic measures.

At a news conference on tax policy and budget proposals, the institute suggested that the government of the Hong Kong Special Administrative Region introduces various measures to maintain Hong Kong’s competitive edge, such as a favorable tax system for businesses and individuals, and making Hong Kong a more livable city.

The government should keep pace with the rapid changes in international tax strategies, with a focus on how to increase tax revenue, as many of the European Union’s policies are affecting Hong Kong

It also proposed that the government improve the business environment to offset its decline in the global financial center rankings last year, for example to offer a 50 percent profits tax relief to qualified companies setting up regional headquarters in Hong Kong to attract more businesses to the city.

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The government should keep pace with the rapid changes in international tax strategies, with a focus on how to increase tax revenue, as many of the European Union’s policies are affecting Hong Kong, said Sarah Chan, chairman of HKICPA’s Taxation Faculty Executive Committee.

“Many overseas companies coming to Hong Kong are concerned about the tax system. As a low tax rate shows the city’s strong competitiveness, it is important for the government to consider how to meet international standards while maintaining competitiveness,” Chan said.

The government could attract more overseas professionals by providing subsidies on education allowances for their children, and retain local talent by improving the city’s living environment, the institute said, adding that the moves could help ease the current exodus of talent.

It estimates that Hong Kong’s fiscal deficit will reach HK$113.9 billion ($14.54 billion) for this fiscal year, more than double the government’s previous estimate, due to COVID-19 induced economic sluggishness, a depressed real estate market and a drop in land sales.

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Despite gradual stabilization of the three-year COVID-19 pandemic, Hong Kong will continue to face various challenges this year due to uncertainty in the global economic outlook, Loretta Fong Wan-huen, president of the HKICPA, said.

Citing the World Bank’s forecast of 1.7 percent growth for the global economy this year, as well as ongoing conflict between Russia and Ukraine, and the impact of high inflation on many economies and rising interest rates as external headwinds, she said Hong Kong’s fiscal reserves could drop to HK$843.2 billion by the end of March.

The institute also welcomed the government’s recent relaxation of pandemic prevention measures to accelerate the pace of economic recovery, and said it hopes that the government will soon remove the remaining prevention policies to further support Hong Kong’s recovery of strength and to reconnect with the international community.