The Hong Kong branch of the Association of Chartered Certified Accountants yesterday called on the Government to introduce tax allowances for mortgage interest in a bid to relieve the burden on homeowners. The proposal is part of the first budget submission put forward to Financial Secretary Sir Donald Tsang Yam-kuen by the local branch of the association, the international accounting body with 9,000 members in Hong Kong. It has asked the Government to introduce a tax allowance of up to $50,000 per family on mortgage interest for homeowners. Association chairman Alice Chan Wing-yee said the proposed move would cost the Government about $2 billion - less than 10 per cent of its tax income. The body has also urged the Government to issue stamp duty rebates to first-time home buyers. Unlike the Hong Kong Society of Accountants and the Liberal Party, the association is proposing that profits tax be maintained at 16.5 per cent but clarifies various sections of the tax ordinance in a bid to attract foreign investors to the SAR. Executive committee member Law Kwong-chau said a slight reduction in profits tax, which has been called for by the other two bodies, would not be enough to attract sufficient foreign investment. 'A reduction in profits tax from 16.5 per cent to 15.5 per cent would reduce the Government's tax income by $1.8 billion. It is not a big deal,' Mr Law said. He said the Government should set up a committee of experts to explain tax treatment. The association is also urging the Government to negotiate with the mainland and other countries to avoid double taxation for companies that carry out cross-border operations. Other proposals include encouraging the government to give a 200 per cent tax deduction for expenditure on approved private research and development projects; to increase personal tax allowances in line with inflation and raise the basic allowance from $100,000 to $108,000, and to allow personal assessments of husbands and wives to be taxed separately.