Taiwan's parliament has approved a so-called "rich man's tax" on nearly 10,000 of the island's wealthiest people in a bid to narrow the widening income gap. Starting next year, those with annual net income of over Tw$10 million ($333,000), or the richest 1.5 percent of individuals or families, will be subject to a 45 percent income tax rate, up from the current 40 percent, said the finance ministry. The revised income tax law passed by parliament Friday also includes business tax hikes on banks and insurers as well as more tax deductions for low-income families, salarymen and the disabled, the ministry said. It is expected to generate an extra Tw$65 billion more a year in revenue for the government, including Tw$9.9 billion from the richest people as well as around Tw$20 billion from the banking and insurance sectors. Finance minister Chang Sheng-ford has said that the taxation reform was aimed at improving income distribution and was backed by tycoons such as Foxconn Group founder Terry Gou. Taiwan's income gap reached a record level in 2011, as the wealthiest families earned 96 times more than the poorest, according to the latest official data. The bottom five percent of families reported an average annual income of Tw$48,000, compared with Tw$4.63 million earned by the top five percent in 2011, based on their income tax filings. Observers have blamed the rapidly widening gap between the rich and the poor as one of the reasons behind a recent string of anti-government protests.