Farmers in southwest China's Sichuan Province need not pay tax on local farm produce starting Sunday, according to a notice issued by the provincial government.

All institutions and individuals engaged in the production or distribution of certain special local farm produce will be exempt from the tax, and the measure is expected to benefit 68 million rural dwellers in Sichuan.

Dong Defu, a loquat grower in Renshou County of Sichuan Province, called the measure "really good news".

With a loquat orchard of about 12 hectares, Dong believed his net income could reach 300,000 yuan (US$35,145) this year.

"Exemption of the tax will save me about 30,000-40,000 yuan (US$3,614-4,819) at least," he said.

Last year, the province posted revenue of 332 million yuan (US$80 million) from the special local farm produce tax, about 1.2 percent of Sichuan's total tax revenue or 0.5 percent of its disposable capital.

Given the fast development of the local economy and increased capital investment from the central government, officials with the provincial government believed the tax cut would help raise the income of farmers.

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