taxes

Caracas, October 24, 2026 (venezuelanalysis.com) – Venezuelan Acting President Delcy Rodríguez announced a series of measures aimed at expanding tax collection.

In a televised broadcast on Wednesday, Rodríguez announced the immediate suspension of the mandatory use of fiscal printers. Introduced in 2018, the devices recorded every transaction and reported it in real time to the country’s National Integrated Customs and Tax Administration Service (SENIAT).

The costly equipment posed a significant barrier for entrepreneurs and small business owners, particularly in the country’s interior, where authorized suppliers are scarce.

Superintendent Román Maniglia said the decision is part of SENIAT’s technological modernization that will pave the way for the gradual introduction of digital invoicing, which will soon be available free of charge to all economic sectors. 

“We seek to lower the barriers to formalization across all sectors, particularly for the smallest businesses, entrepreneurs, and small and medium-sized enterprises (SMEs),” he stressed.

Rodríguez also announced a review of the registry of Special Taxpayers, known as “special contributors,” with the list reduced from 132,000 to around 44,000. These are individuals or legal entities that, because of their high income or assets, are subject to additional tax obligations.

According to the acting president, the review will add those who should have been included in this category and remove those who were classified as special taxpayers without meeting the relevant criteria.

Rodríguez said the changes are intended to improve tax services and expand revenue collection. She added that fiscal revenues rose by 27% in October, although she did not specify the basis for comparison or provide a breakdown of the amount collected. 

“We have been discussing the very low number of people who pay taxes in the country. This is a matter of fairness,” she added.

The latest announcements follow prior measures to facilitate tax collection. Earlier in October, SENIAT and banking superintendency SUDEBAN formalized an agreement to exchange information in real time in order to “strengthen revenue collection” and “facilitate the identification of potential tax discrepancies.”

The tax authority is now also interconnected with the Autonomous Service of Registries and Notaries (SAREN), the Administrative Service for Identification, Migration, and Immigration (SAIME), and the Central Bank of Venezuela (BCV).

“We have a very important system for cross-referencing information which, together with a new statistical information system, will allow us to start collecting what is owed,” Rodríguez said in this week’s broadcast. She added that the fiscal revenues will be directed to the Venezuela Renace Foundation, which is responsible for repairing and rebuilding homes damaged by the twin earthquakes of June 24.

The acting government has likewise announced a tax reform to be unveiled before the end of 2026. Its stated goal is to “harmonize the tax burden” so that it supports economic growth and private-sector production. 

In parallel, the Rodríguez administration is also pushing labor reform plans alongside private sector lobbies FEDECAMARAS and FEDEINDUSTRIA. The business representatives are proposing a “Law on Labor and Social Consensus,” also referred to as the Labor Emergency Law, that will reportedly reduce labor costs for employers. 

The proposal is being discussed with select trade unions, including the government-aligned Bolivarian Socialist Workers’ Central of Venezuela (CBST).

According to reports, the draft legislation seeks “transitional and alternative solutions” to the crisis in workers’ incomes and the stagnation of the minimum wage, which has remained frozen since 2022 while authorities prioritized non-wage bonuses. The proposal would not formally overhaul the entire Organic Labor Law, Workers and Employees (LOTTT), enacted under President Hugo Chávez in 2012, but labor activists warn that it would effectively sideline some of its provisions.

The landmark 2012 legislation reinstated the retroactive calculation of social benefits and severance based on a worker’s last salary, a provision that business groups want to eliminate, while trade unions consider it a red line. Workers’ organizations have staged multiple protests in recent months, demanding that the Rodríguez administration convert non-wage bonuses into salaries and reinstate collective bargaining rights.

Edited by Ricardo Vaz in Caracas.

Reporting from Sacramento — Are rich people fleeing California to escape astronomical state income taxes? That’s the word. But it’s fake news.

In fact, more wealthy people are moving to California than leaving, research indicates. It’s the poor and middle class who are departing.

It makes sense. If you’re getting rich in California and can afford to live comfortably here in this balmy climate, there’s little incentive to leave — except to stick it to the tax collector in Sacramento.

“If you’ve got your business here and you’re making money, it’s hard to leave,” says Allan Zaremberg, president of the California Chamber of Commerce.

“And if you’re making money in California, you’re still going to get taxed here even if you live in Texas,” he said. “You get taxed where you make the money, regardless of where you live.”

Loren Kaye, president of the California Foundation for Commerce and Education, a chamber affiliate, cautions: “You can’t shelter your income simply by moving out of state. If your business or work is in California, that’s where you’re taxed. California very aggressively collects taxes.”

But, he adds: “If you’re retired or living off of investments, that’s different.”

You can move to Nevada, where there’s no state income tax, and live off a California public pension without paying either Sacramento or Carson City.

The long-speculated California tax escape was mentioned in lots of emails last week after I wrote about superstar baseball slugger Bryce Harper. He rejected competitive offers from the Dodgers and San Francisco Giants and signed a 13-year, $330-million contract with the Philadelphia Phillies in low-tax Pennsylvania.

Avoiding California’s highest-in-the-nation 13.3% income tax rate was just one of several reasons Harper signed with the Phillies. He also liked their hitter-friendly ballpark. And he felt comfortable playing in the National League East, where he has spent his entire major league career.

But Harper will save many millions in taxes by not playing for a California team, a strong inducement despite his hometown being nearby Las Vegas.

More from George Skelton »

California’s income tax has become even more burdensome for the wealthy and many middle-class residents because of new federal so-called reforms. President Trump and the previous Republican Congress stripped our ability to deduct all state income and local property taxes on federal returns. There’s now a $10,000 limit.

Harper’s avoidance of this state seemed symbolic of the California tax-flight tale that has circulated for years. But apparently it’s mostly made up.

Sure, there are anecdotes galore. Everyone seems to know someone who has fled California to dodge its high taxes. But there’s no wholesale bolting of the rich.

“Substantially more rich people are moving into California than moving out,” says Cristobal Young, a Cornell University sociology professor. He teamed with others at Stanford University’s Center on Poverty and Inequality to write a research paper on “Millionaire Migration in California.”

“They want to be where the action is,” Young says. “There’s more opportunity in California. There are a lot of ways to make a lot of money in California, more than other places. A lot of that is tech, but it’s a diverse economy….

“People who want to make money tend to live where other high-income people are. It’s one thing to say, ‘I’m going to leave California to save money on taxes.’ But that means leaving clients, collaborators, investors, friends….

“It’s not that rich people are moving to Reno and Nevada,” Young adds. “They’re moving to San Francisco and making living costs miserable for a lot of people.

Coverage of California politics »

“California has a net out-migration of low-income folks who can’t afford to live in their state and are being pushed out by high-income homeowners. And there’s a whole other story of middle-class people struggling to pay their bills and the housing shortage hitting them hard.”

The Stanford report concludes that California has “consistently become a more attractive place for millionaires,” adding that perhaps this is because California has become “a winner-take-all economy.”

Similar findings have been reported by other organizations.

“Although California has had net out-migration among most demographic groups, it has gained among those with higher incomes ($110,000 per year or more) and higher levels of education (graduate degrees),” the state Legislative Analyst’s Office determined last year.

Next 10, a public policy think tank, found that “the main driver for net out-migration appears to be high housing costs since migration rates are highest for those at lower-wage levels…. The vast majority of people who moved out of California were concentrated in lower-skilled, lower-paying fields.”

State demographers, digging into federal census data, found that significantly more people earning above $125,000 were moving into California than were leaving. And more earning less than $75,000 were taking off.

In the January state budget document, there also was this observation: “Over time the state…has become more educated on average due to outward migration of less educated residents…and inward migration of more educated people.”

So the wealthy are not fleeing California in droves even though they’re being hammered by state income taxes. The top 5% of earners pays two-thirds of the tax. The bottom 80% pays less than 11%. That’s just bad tax policy because it leans too heavily on rich people’s capital gains that plummet during a recession.

Fortunately the rich are staying with us, fueling the economy and funding state government. And they keep arriving.

george.skelton@latimes.com

Follow @LATimesSkelton on Twitter

Gov. Gavin Newsom last week signed legislation cracking down on the practice of luxury-car buyers in California registering cars out of state to avoid taxes.

Senate Bill 1406, introduced by state Sen. Jerry McNerney (D-Pleasanton), closes the so-called Montana loophole, in which tax evaders create shell companies in Montana or other states without sales tax or vehicle registration fees and use them to purchase Ferraris, Porsches and other luxury cars. The state estimate it loses millions of dollars annually because of such schemes.

The new law expands California’s definition of who is a resident under state sales tax law in an effort to weed out phony shell companies, making a company liable for state taxes when at least one member of the business is a California resident.

The law, which went into effect immediately, also authorizes the state tax agency to impose tax liability on individual members of a business.

California had already looked to enforcement efforts to investigate suspicious out-of-state car sales, which officials estimate amount to $10 million annually in lost tax revenue.

Under state law, residents were already required to pay California sales tax on vehicles unless they are first used out of state and stay out of state for at least 12 months. Dealers are required to maintain records showing sales of vehicles so that authorities can ensure vehicles sold to buyers in another state are actually delivered there.

Earlier this year, the state’s Department of Justice charged 14 people — including auto dealers and customers purchasing cars — with concealing the purchase of more than $20 million worth of high-end vehicles including Ferraris, Porsches and Lamborghinis, and evading upward of $1.8 million in state taxes.

Text messages included in the criminal complaint showed buyers seeking to conceal their purchases. One Lamborghini buyer boasted about fees avoided: “70k saved — I can’t believe Montana registration lasts for 5 years — that’s crazy. Stupid California. Paid 3k to own a 600k car for 5 years — lol in Cali that’s like 75k for 5 years. Hella dumb.”

The new law further develops criteria to help show an LLC as a shell company involved in a potential tax evasion scheme.

If the LLC lacks a specific business activity or purpose, fails to maintain a physical location outside California, fails to employ people, or fails to file federal tax returns in another state, it could now be considered as evidence of such a scheme.