China will pursue a more proactive and effective fiscal policy with government fiscal deficit projected to be 3 percent of its GDP, according to a government work report available to the media on Sunday.[Special coverage]
While the deficit-to-GDP ratio stays unchanged from last year, the government fiscal deficit volume is set at 2.38 trillion yuan (about 345 billion U.S. dollars), a year-on-year increase of 200 billion yuan, said the report to be delivered to the national legislature annual session.
In a breakdown, the projected deficit of the central government is 1.55 trillion yuan, and that of local governments is 830 billion yuan.
Keeping the deficit-to-GDP ratio unchanged at 3 percent aims to "allow for further reductions in taxes and fees," the report says.
Tax burden on businesses is expected to be further eased by around 350 billion yuan, and business related fees will be further cut by around 200 billion yuan to benefit market entities.
"We will keep government spending low and enrich our people," says the report, promising that the government will squeeze out more funds to cover cuts in taxes and fees.