Vice Minister of Finance Shi Yaobin says the preparations for the upcoming value-added tax reform are basically completed. [File Photo: scio.gov.cn]

China's financial and taxation authorities have announced that the preparations for the upcoming value-added tax reform are basically completed.

Starting from May 1st, the replacement of business tax with VAT will be extended to construction, real estate, finance and consumer services.

The pilot sectors will involve 10 million more taxpayers, whose yearly business tax was nearly 2 trillion yuan in total, accounting for 80 percent of the gross business tax revenue.

Vice Minister of Finance, Shi Yaobin, says the VAT pilot program is the largest one since 2013.

"It's been predicted that the VAT reform will ease taxes by 500 billion yuan or 77 billion US dollars in 2016. Meanwhile, it also helps to avoid double-taxation, reducing the tax burdens on all industries. The reform is an important arrangement to bring the VAT's neutral function into play, so as to promote the fair development of all sectors."

In addition, the reform involves many economic transaction activities of enterprises and individuals.

Among them, the tax burden on transactions involving second-hand housing has been one of the biggest concerns among the people.

Wang Kang is deputy director of the State Administration of Taxation.

"The VAT reform will help to reduce the tax burden when people buy a second-hand house. In the past, the business tax rate was 5 percent. If people spent 100-thousand yuan, they would pay a 50-thousand yuan tax. Starting from May, housing buyers will pay 24-hundred yuan less than before."

A business tax-to-VAT pilot began four years ago, and has been gradually expanded.

It has reduced the tax burden of enterprises, most of which are small companies, by 640 billion yuan as of the end of 2015.