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Employees in the finance, real estate and education sectors, and foreign-funded enterprises, who are regarded as high-earners, will be carefully monitored by revenue officers, said Wang Jiping, head of the Beijing Municipal Bureau of Taxation.

Those earning more than 120,000 yuan (about 15,400 U.S. dollars) annually must declare personal income voluntarily on the Internet from January 1, next year, according to a regulation released Wednesday by the bureau.

More than five million individuals with a monthly income of more than 1,600 yuan (205 U.S. dollars) in Beijing are paying tax, and some 250,000 are earning in excess of 120,000 yuan every year, Wang said.

He projected the city's personal income tax revenues at more than 22 billion yuan (about 2.8 billion U.S. dollars) this year.

The high income group includes entrepreneurs, university teachers, government officials, singers and film stars as well as employees of foreign-funded enterprises and workers in monopoly sectors such as petroleum and telecommunications, Wang said.

The rich group will be subject to fines of up to 10,000 yuan if they fail to report their income by the March 31 deadline, according to the regulation.

Beijing's measures follow on from the regulation issued in early November by the State Administration of Taxation (SAT).

The regulation told the following groups to report their income to the taxation authorities: people earning more than 120,000 yuan a year, those with income from more than one organization or from overseas, those whose employer does not pay tax, or those in other particular situations defined by the State Council.

This is the first time that the State Administration of Taxation has required high-income earners to report their earnings. However, their taxes will continue to be deducted at sources by employers.

The new regulation will improve tax collection among high income individuals and help narrow the gap between the rich and the poor, said SAT deputy director Wang Li.

A study shows China's Gini Coefficient, a measure of income inequality, has reached 0.46, indicating a big and expanding wealth gap.

In another move to reduce the country's widening income gap, China's legislature, the Standing Committee of the National People's Congress (NPC), doubled the personal income tax exemption threshold in late 2005 to 1,600 yuan a month. This halved the number of people required to pay tax.