President Macapagal Arroyo has recently signed Republic Act 9504 (RA 9504) which is also called the Tax Relief for Minimum Wage Earners Act last Tuesday, June 17, 2008.

The official title is “An Act Amending Sections 22, 24, 34, 35, 51 And 79 of Republic Act 8424, As Amended, Otherwise Known As The National Internal Revenue Code Of 1987.”

This means that all individual taxpayers will have an exemption of Php50,000 from their annual income. That means if you have Php200,000 in annual income, only Php150,000 is subject to tax. Anyone with income less than Php50,000 will not have to pay any tax at all.

The ff. are the Tax Schedule based on Annual Income:

“Not over P10,000 –> 5%

“Over P10,000 but not over P30,000 –> P500+10% of the excess over P10,000

“Over P30,000 but not over P70,000 –> P2,500+15% of the excess over P30,000

“Over P70,000 but not over P140,000 –> P8,500+20% of the excess over P70,000

“Over P140,000 but not over P250,000 –> P22,500+25% of the excess over P140,000

“Over P250,000 but not over P500,000 –> P50,000+30% of the excess over P250,000

“Over P500,000 –> P125,000+34% of the excess over P500,000 in 1998