The Chinese government reiterated the key elements of its value-added tax reforms on Tuesday. Officials from the Finance Ministry and State Administration of Taxation say the reforms will ease the tax burden on companies and pave the way for an advanced tax system.

The pilot tax reform program began in 2012 and will expand next month as the value added tax goes nationwide. Vice Finance Minister Shi Yaobin says the expansion has two purposes.

"The full scale value added tax, means double expansion. One refers to all the business sectors, including real estate, construction, finance and services. The other means the VAT for real estate would become deductible. So the expansion completes the whole chain of the value added tax," Shi said.

Deductibles directly determine how much income would be taxed, and the inclusion of real estate expenses would bring tangible benefits for businesses.

That would also influence many people as home buyers are eligible to deduct the sales taxes on their new houses.

"Take a one million yuan home for instance. We used to apply a 5 percent sales tax for the whole price, which is 50 thousand yuan. Now we collect valued added taxes. The taxable base would be the total price less the tax you paid. So the base becomes smaller, and home buyers' costs become lower," said Wang Kang, deputy commissioner, State administration of Taxation.

The move is the last step in the four-year long value added tax reform process but it is significant. The four sectors ready to join the program cover 80 percent of the companies that pay the value added tax, ranging from huge home developers to mom-and-pop shops on the street. The move also erases double taxation.

"We have been applying the value added tax to production, and machinery and fixed assets were not deductible. Now we add fixed assets as deductibles, and we have transformed the production-based tax to a consumption based tax. And what would be the benefit? The biggest one is avoiding double taxation. We lowered the corporate tax burden, and are facilitating economic restructuring," Shi said.

Over 11 million companies are going to gain from the value added tax starting in May, with an estimated 500 billion yuan tax deduction this year. Small businesses in the service sector are the major beneficiary. That would help China's economic restructuring. What's more, the VAT is the single largest source of tax income for the country, and an improvement in this area is another step forward for the country's tax reforms.