Hong Kong's top accounting body has urged easier entry to the mainland for local firms to be included in the third phase of the Closer Economic Partnership Arrangement (Cepa). Paul Chan Mo-po, vice-president of the Hong Kong Institute of Certified Public Accountants (HKICPA), said rules laid down in the first two phases of Cepa offered very limited assistance to local accounting firms trying to expand in the mainland. They are only allowed to open representative offices or act as consultants to Chinese accounting firms, Mr Chan said yesterday. He hoped the third phase of Cepa would include arrangements for Hong Kong accountants to establish joint ventures with mainland firms. Speaking on radio, Mr Chan said the HKICPA had held discussions with the Financial Services Bureau and mainland authorities on the issue, although he did not disclose their reaction. Details of the third phase of Cepa - first promulgated by the central government in 2003 to bolster economic ties between Hong Kong and the mainland - are expected to be unveiled between this month and next. There are nearly 100 local accounting firms working with their mainland counterparts to expand business in the country. Meanwhile, Mr Chan predicted that the Hong Kong government would achieve its target of eliminating the budget deficit by fiscal year 2008-09 amid the strong economic recovery. He said there was now room for further tax cuts. He urged Chief Executive Donald Tsang Yam-kuen to include a 0.5 per cent salary tax cut in his maiden policy address next month. 'The several tax increases implemented in the past were only temporary measures to relieve the government's fiscal pressure,' he said. 'With the economy improving at its current pace, I'm confident the government will be able to meet its target of reducing the deficit even if they cut taxes now.' The government should also cut interest rates on mortgage plans while leaving the level of tax allowances unchanged, Mr Chan added. He urged the government to begin formal consultations on the introduction of sales tax, which he said would provide room for further salary tax cuts.