China's tax and fee cuts will be larger in 2022 than last year's 1.1 trillion yuan ($173.5 billion) in reductions. Expenditure will support key areas including technology, environment protection, people's livelihoods, major regional strategy and modern agriculture, Finance Minister Liu Kun said on Tuesday.

Small and medium-size enterprises (SMEs) will be one of the major beneficiaries of the tax cuts. In 2021, all domestic value-added tax and corporate income tax for manufacturing SMEs were deferred. The central government also allocated 3 billion yuan in awards and subsidies to support financing for SMEs, said Yu Weiping, vice finance minister.

Meanwhile, general transfer payments to local governments will be greatly increased this year, and lean towards areas facing difficulties and underdeveloped areas, Liu said.

Liu said local governments will continue to issue special bonds. In January, local governments issued 484.4 billion yuan in special bonds under the 2022 advance quota of 1.46 trillion yuan, for use in transport, city planning, industrial parks, and government-subsidized housing.

The country's fiscal revenues constituted 20.25 trillion yuan in 2021, up 10.7 percent year on year.