Malabon Grants 100% Tax Exemption to Sari-Sari Stores and Carinderias in 2025

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In a groundbreaking move to uplift small business owners, the Malabon City government has announced a 100% tax exemption for sari-sari stores and carinderias for the entire year of 2025. This initiative, introduced through City Ordinance 01-2025, underscores the city’s commitment to supporting micro-enterprises that play a vital role in the local economy and community.

A Financial Lifeline for Small Businesses

Mayor Jeannie Sandoval, the driving force behind this progressive ordinance, highlighted the importance of easing the financial burdens faced by small business owners. She emphasized that this initiative reflects the administration’s dedication to improving the livelihoods of Malabueños. The tax exemption aims to help sari-sari store owners and carinderia operators reinvest their savings into their businesses, enhancing their profitability and sustainability.

However, the ordinance excludes establishments that have diversified into unrelated activities. For instance, sari-sari stores operating as car repair shops or carinderias doubling as karaoke bars will not qualify for the exemption. This ensures that the tax relief is targeted at micro-enterprises solely focused on their primary purpose.

Tax Waiver with Regulatory Requirements

The Malabon Business Permit and Licensing Office (BPLO) clarified that while the tax is fully waived, business owners must still comply with regulatory fees and other charges to maintain operational compliance for 2025. For businesses that have already renewed their permits for 2025, the exemption will apply starting in 2026.

Were Sari-Sari Stores and Carinderias Taxed Before?

Yes, sari-sari stores and carinderias in the Philippines are traditionally subject to various taxes and fees. Under the Tax Reform for Acceleration and Inclusion (TRAIN) Law, businesses with annual gross sales exceeding ₱250,000 but not more than ₱3 million can opt for an 8% flat income tax on gross sales exceeding ₱250,000 or choose graduated income tax rates.

For example, a sari-sari store earning ₱350,000 annually would be taxed ₱8,000 under the flat rate system. Meanwhile, those earning less than ₱250,000 are exempt from income tax. Despite this, micro-entrepreneurs are still required to secure a Tax Identification Number (TIN), register with the Bureau of Internal Revenue (BIR), and pay local business permit fees.

The tax burden often discourages small business owners from formalizing their operations, leading to informal businesses struggling to access government programs or financing.

A Growing Trend Among Local Governments

Malabon is not alone in taking steps to ease the financial burden on micro-entrepreneurs. In 2024, Marikina City implemented a similar program, exempting sari-sari stores and small eateries from business tax and permit fees. These proactive measures reflect a growing acknowledgment of the critical role small businesses play in sustaining the economy and providing livelihood opportunities.

A Call for Nationwide Reform

While Malabon and Marikina set a commendable example, the sad reality remains that most local government units (LGUs) across the Philippines still impose taxes on sari-sari stores and carinderias. These businesses, often run by individuals from low-income households, are the lifeblood of many communities. Yet, they are subject to the same bureaucratic and financial challenges as larger enterprises.

As these cities show, alleviating tax burdens can empower small business owners, stimulate local economies, and encourage formalization. The question now is whether other LGUs will follow suit and prioritize the welfare of their constituents over revenue generation.

Looking Ahead

The 100% tax exemption in Malabon offers a beacon of hope for small business owners and serves as a model for other cities and municipalities. By reducing the financial strain on sari-sari stores and carinderias, Malabon is fostering an environment where small businesses can thrive, ultimately contributing to a more inclusive and sustainable economy.

The rest of the nation—and its LGUs—should take note: empowering small businesses is not just good governance; it’s a vital step toward a more prosperous and equitable society.

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