China's central, provincial and city governments will set aside over 100 billion yuan (12.5 billion U.S. dollars) this year to make up for the fiscal income losses of grassroots governments in a tax reform aimed at easing the burden of farmers, a senior economic official said Wednesday.

Chen Xiwen, deputy director of the Office of the Central Financial Work Leading Group revealed that the central government will mete out more than 78 billion yuan, while provincial and city governments offer roughly 25 billion yuan to the end.

The ongoing rural tax reform targets at abolishment of various kinds of irregular or illegal fees and taxation on farmers, whose income stood at less than one-third of urban dwellers last year.

Addressing a press conference sponsored by the State Council Information Office, Chen said the Chinese government is offering free nine-year compulsory education to students in less economic dynamic central and western areas starting this year, pledging nationwide implementation in 2007.

He said irrigation and truck transport fees and other charges should be publicized to farmers, and an accountability system -- aimed at punishing local government officials who increase farmers' economic burdens -- will be established.

Additionally, grassroots governments will cut down staff and departments to reduce daily expenditure, Chen said.

Source: Xinhua