The government should introduce group tax relief, cut corporate taxes and simplify tax reporting procedures for small and medium-sized enterprises to strengthen the city's competitiveness, according to the new chairwoman of the Hong Kong General Chamber of Commerce. Lily Chiang Lai-lei said corporate tax should be cut to 16 per cent - the level that applied in 2002-03 - as soon as possible. It currently stands at 17.5 per cent. 'The tax was increased when the government faced a lot of financial difficulties,' said Dr Chiang. 'The government should return the wealth back to the business sector when the fiscal situation is good. It did not do so in this financial year, so it should get this done next year. 'The chief executive has pledged to cut profits tax to 15 per cent by the end of his new term. It will be very good if he can deliver that,' she said. 'Singapore has slashed profits tax to 18 per cent. They are now catching up and we have to do something.' Dr Chiang said group tax relief, which would make it possible for profits reported by parts of the same group of companies to be offset by losses in others, is important to the city's competitiveness. 'This has been introduced in many foreign countries. Adopting group tax relief could encourage more foreign firms to invest in Hong Kong,' she said. 'I believe the government will not suffer any financial loss in the end.' She said the existing tax reporting procedures were too complicated for small firms. 'Companies with turnovers of [HK]$1 million a year are doing the tax return in the same way as a corporate making [HK]$1 billion a year. Simplifying these procedures can significantly reduce their operating cost.' The chambers would push hard for these tax reforms in the coming year, she said. Dr Chiang, a specialist in the environmental protection business, agreed that companies in Hong Kong 'can definitely do more in [terms of] corporate responsibility'. The chamber launched the Clean Air Charter campaign last year, but only 600-plus companies had signed so far. 'Of course, we want more corporates to sign. But the air charter is just a starting point.' The chamber will promote the concept of a work-life balance among companies, such as a five-day week, she said. And companies should also consider taking a more flexible approach to retirement age, since those in their 50s are important assets in the city economy. But she stressed this should not be done through legislation. 'We support five-day work, but this cannot be done through legislation. Corporates have their own business needs, and many small companies have difficulties in adopting five-day work. And we do not agree with [a] minimum wage. I am afraid that this will lead to indirect discrimination against those with stronger abilities, since everybody would be paid a certain amount.' Dr Chiang reiterated that the chamber believed Hong Kong should have universal suffrage. But she did not say whether it should begin by 2012. Elected this month as the chamber's first chairwoman in its 146-year history, Dr Chiang said her election showed that its members were open-minded. Her family and friends were more excited by it than she was. 'My husband quoted [US] astronaut Mae Jemison, who said, 'never limit yourself because of others' limited imagination'. I will remember this.'