Premier Zhu Rongji hailed the pilot rural tax reform in East China's Anhui Province for achieving "periodic success" after just one year.
Zhu listed the success as increasing farmers' income, harmonizing the relationship between farmers and village and township authorities, and improving grass-roots democracy.
However, he said problems still existed, making the reform one of the top tasks for the government this year.
"The problems must be encountered and solved with the help of financial aid from central government," Zhu said.
Zhu encouraged the officials and farmers of Anhui to work hand in hand and set a good example for the rest of the nation in the "tax-for-fees" reform.
The country, traditionally an agricultural society boasting the world's largest rural population, kicked off the reform earlier this year to abolish assorted charges on farmers. The reform is so named for the principle of replacing such fees with a stable tax assessment rate.
The reform started on a trial basis in Anhui Province at the beginning of 2000, which is home to several other historic land reforms.
Upon the completion of the tax-for-fees reform, Chinese farmers will hand in 50 billion yuan (US$6.3 billion) in agricultural taxes but no extra fees, compared with 30 billion yuan (US$3.6 billion) in tax in the past and 60 billion yuan (US$7.2 billion) in fees to village-level administrations. Some 30 billion (US$3.6 billion) more was wantonly levied by local officials under assorted names.
More farmers will benefit from the reform, which will spread to the rest of China by late 2002.
The central government has allocated up to 30 billion yuan (US$3.6 billion) to guarantee funding for education and other public services that otherwise might be cut because of a loss in tax revenue.
"The reform is positive, first and foremost, because it will check the rampant trend of concocting excuses to levy charges," Zhu said during his recent inspection in the pilot province.
As many as 50 assorted surcharges -- from a fee on pig slaughtering to one for road construction -- were removed last year in Anhui. That sliced 31 percent off the farmers' tax burdens there.