The Taxation Institute of Hong Kong on Monday urged financial secretary Paul Chan to provide more tax incentives to attract and retain talent, and conduct a comprehensive review of the local tax regime.

Ahead of the financial chief’s budget announcement next week, the institute urged Chan to cap the top salaries tax rate at 15 percent – as opposed to the current 17 percent.

"It is a pretty low and attractive personal tax rate, compared with many competing countries or jurisdictions elsewhere in the Asia Pacific, such as Singapore," Desmond Wong, chairman of the institute’s professional standards committee, said.

He added that there should also be tax breaks for those supporting their parents or grandparents who live elsewhere – as long as these dependents are Hong Kong permanent residents.

Meanwhile, the institute called on the administration to reform its tax system to provide more clarity and certainty for businesses.

"Currently... there are so many overly restrictive anti-avoidance provisions. There are lots of conditions that are difficult to understand," Anita Tsang, the co-chairman of the institute's tax policy committee, said.