Vice Premier Li Keqiang has urged local governments to improve and implement structural tax-reduction polices, while pushing forward fiscal and tax reforms to help stabilize growth.

Li made the remarks at two meetings held in the Municipality of Shanghai from Thursday to Friday, discussing issues concerning the country's economic growth and major fiscal and tax reforms.

To cope with a complex and fast-changing domestic and external environment, Li said it's important for the country to stabilize growth and contain consumer prices.

"Fiscal and taxation leverage is an important means to adjust economic operation and promote restructuring," the vice premier said.

The government should increase its public spending and optimize its spending structure, while deepening fiscal and tax reforms and launching structural tax-reduction, Li went on.

Government spending and tax-reduction should be directed to rural-related issues and small and micro-sized enterprises, focusing on stabilizing prices and improving people's livelihoods, so as to create a favorable environment for enterprises, technological innovation and restructuring, he said.

The consumer price index, a main gauge of inflation, grew 5.4 percent year-on-year in 2011, well above the government's full-year target of 4 percent, pushing up both corporate and people's living costs.

China's fiscal revenue grew 24.8 percent year-on-year to hit a record high of 10.37 trillion yuan (1.64 trillion U.S. dollars) in 2011, while its fiscal spending rose 21.2 percent to 10.89 trillion yuan, official data showed.

To reduce tax burdens, the government initiated a series of policies last year, including cutting tariffs on imports of energy resources and raw materials and raising the thresholds on value-added tax, turnover tax as well as personal income tax.

The Shanghai municipal government also started a reform on a trial basis this year -- using value-added tax to replace turnover tax in its modern service sector and transportation industry. About 120,000 enterprises were included in the trial.

At the finance and taxation reform meeting, local officials and company representatives said the reform has lowered corporate tax burdens and helped expand the local service market.

Li said replacing turnover tax with value-added tax, part of the government's efforts to launch structural tax-reduction, is crucial to the country's drive to adjust its economic structure.

The reform will help eliminate duplicate taxing, reduce tax for small taxpayers, create jobs and give momentum to technological innovation, he said.

Li urged local authorities to learn from the trial program, gradually expand it to more industries and regions, and apply the reform to the whole nation during the country's 12th Five-Year Program (2011-2015) period.

Meanwhile, Li reiterated the importance of boosting domestic demand, saying that the traditional means of maintaining growth can no longer be maintained when addressing challenges of a lackluster global market and aggravating resource and environment constraints.

Export-oriented regions should also increase efforts to explore the domestic market and develop the real economy, Li said.

In an article published Thursday in Qiushi, or "Seeking Truth," the flagship magazine of the Communist Party of China, Li called for expanding domestic demand so as to speed up economic restructuring.

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