BEIJING, Oct. 8 -- China's cabinet on Wednesday announced an action plan for better budget management as part of efforts to build a more transparent and more efficient fiscal and taxation system.

The long-awaited decision by the State Council was seen as the first step to jump start a new round of broader fiscal and taxation reforms by 2020 as it tries to ensure all government income and spending is included under the management system.

Under the decision, the State Council outlined seven reform tasks on the budget's drafting, implementation, transparency and supervision, ordering a clear division of roles between the government and the market.

A multi-year budget balancing scheme will be introduced to better manage and control unused government expenditures in the fiscal year, while local government debt will be regulated more strictly to guard against fiscal risks, according to the plan.

Fiscal preferential measures need to be gradually withdrawn in sectors and areas where market forces can play their role, it said, adding that government expenditures outside the budget will be supervised to prevent corruption.

Announcement of the action plan came after China's top legislature in August adopted the country's first revision to the Budget Law since 1995 to clear ambiguity and close loopholes in managing the trillions of yuan in fiscal revenue and spending.

In 2014, China's fiscal revenue is budgeted to be 13.9 trillion yuan (2.25 trillion U.S. dollars), and government spending is expected to be more than 15 trillion yuan.