China will cut the value-added tax (VAT) for the manufacturing sector to 13 per cent from 16 per cent, and the VAT for the transport and construction sectors to 9 per cent from 10 per cent, Li said.
China will push the economic development of Yangtze river delta and build an integrated transportation system along the river.
Spending on the Communist Party's military wing, the People's Liberation Army, will rise to 1.2 trillion yuan ($178 billion), according to a separate report issued by the finance ministry.
As the growth rate of the Chinese economy slowed following US-imposed tariffs on Chinese goods worth billions of dollars past year, Beijing has now taken new measures to reignite its economy, using tax cuts as the first line of defence to reverse the losses.
China's top economic official is promising all companies are to be "treated as equals" in a bid to defuse US and European trade complaints.
The world's two biggest economies have also been engaged in an economic conflict over United States allegations that China steals technology and forces foreign companies to hand over trade secrets in an aggressive push to challenge American technological dominance. A range target was also set for 2016 at 6.5-7 percent.
For this year, Beijing has arranged a national economic agenda built around manageable debt risks, a sustainable environment and the alleviation of poverty.
Premier Li Keqiang told the National People's Congress that the government is cutting taxes, boosting infrastructure investment and stepping up lending in a bid to shore up the country's slowing economy.
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In terms of monetary policy, Lee said the government will keep it neither too tight nor too loose, and will not resort to a flood of stimulus while growth in M2 money supply and total social financing this year will be in line with nominal GDP growth.
According to PwC's recently published 22nd Annual Global CEO Survey China Report, 73% of CEOs in mainland China believe that global economic growth will improve, compared to 41% of CEOs in Hong Kong and 42% globally.
Military reforms are almost complete, and "China needs the money to be used for more urgent matters", he said.
Nevertheless, the growth target sets a barometer for China's economic performance not only to outside observers and investors, but also to regional governments and lenders.
"China has increased defense spending at a high rate for some time and Japan would like to see a high level of transparency in regard to its defense policy and militarization", the Japanese government's spokesman Chief Cabinet Secretary Yoshihide Suga said on Tuesday. This year, Li also did not announce any targets for growth in retail sales or fixed asset investment.
"We will implement the military strategy for the new era, strengthen military training under combat conditions, and firmly protect China's sovereignty, security, and development interests", he said.
Separately, China's top banking regulator said on Tuesday Beijing could "absolutely" reach an agreement with the United States on opening up its financial sector.