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China has raised its 2016 deficit target to 3 percent of GDP, in an effort to bolster government spending and ease enterprises' tax burden, according to this year's Government Work Report.

A mother from Xintai, Shandong province, teaches her son how to manage money matters. [Photo/China Daily]

Expenditure will exceed revenue by 2.18 trillion yuan ($335 billion) this year, 560 billion yuan higher than last year's deficit, Premier Li Keqiang said on Saturday.

The deficit target is in line with expectations that the government would ramp up its spending to counter the economic downturn.

Li said the projected increase in government deficit will primarily cover tax and fees reduction for enterprises.

He vowed to expand value-added tax reform to all remaining sectors this year and cut the tax burden on service sectors.

Starting from May 1, the reform will be extended to the construction, real estate, financial, and consumer service industries. China will also abolish and suspend some government-managed funds levied on enterprises.

These policies will cut the tax burden on enterprises and individuals by more than 500 billion yuan, to be covered by the deficit increase. The government will also step up spending on living standards and areas in need of strengthening, according to the report.