BEIJING — China will intensify tax and fee cuts with targeted measures in 2022 to bring benefits for market entities and bolster economic growth, according to the Finance Ministry on Feb 22.

"China will see a larger scale of tax and fee cuts this year," the minister of finance Liu Kun told a press conference, citing that the country cut about 1.1 trillion yuan (about $173.9 billion) of taxes and fees last year.

In recent years, the country has given full play to tax and fee deductions in vitalizing market entities and shoring up economic development, said Xu Hongcai, vice-minister of finance.

"On the surface, tax and fee cuts can slice fiscal revenue, but in essence, the move has propelled economic growth and a subsequent increase in fiscal revenue," Xu said.

Official data shows that China now boasts over 150 million market entities, while a total of 13.26 million firms were newly established and have engaged in tax-related activities in 2021, up 15.9 percent year-on-year.

The implementation of tax and fee cuts policies has reduced the burden on market players and strengthened their resilience, Xu said.

To further vitalize market entities, this year the country will intensify tax-deduction efforts and launch targeted support measures while focusing on the high-quality development of the manufacturing industry, smaller businesses and scientific innovation.

Preferential tax measures should move in tandem with other proactive fiscal, monetary and industrial policies to help market players tide over difficulties, according to Xu.

Amid the tax and fee cuts, the growth of local-government revenue will slow down, Xu noted, adding that the central government will significantly increase transfer payments to local governments.

These funds will mainly flow to less developed regions, those in difficulty, and those where fiscal revenue faces mounting pressure from tax and fee cuts, he added.

The country will maintain appropriate levels of fiscal expenditure while giving priorities to key sectors including sci-tech breakthroughs, environmental protection and major regional strategies, Liu said.

Measures will be taken to allocate local government special bonds in a reasonable manner, Liu said, noting that the country issued 484.4 billion yuan in January to fund projects in the transport, industrial park infrastructure and other key areas.

The figure accounted for one-third of the 1.46 trillion-yuan funds that were allocated late last year from the country's 2022 quota for local government special bonds.

The advance allocation is aimed at stimulating effective investment and mitigating economic pressure, Xu added.