Rome, Tuesday, October 29, 2024 – Italy is set to impose a significant tax hike on Bitcoin, raising capital gains tax from 26% to 42%, a 61% increase.
The proposed tax, which targets profits realized from Bitcoin sales, is intended to curb the growing interest in cryptocurrencies and help fill financial gaps exacerbated by the COVID-19 pandemic.
Deputy Finance Minister Maurizio Leo hinted that the move aims to discourage Italians from investing in Bitcoin, with concerns that increasing cryptocurrency popularity could undermine the euro.
Critics argue the tax hike is discriminatory, as other asset classes remain taxed at the current 26% rate, and could drive investors to seek more favorable tax environments abroad.
The crypto community has voiced strong opposition, with some investors threatening to leave Italy due to the unfavorable conditions.
Italian Bitcoiners like Dario Giardina believe the policy could hurt the country’s economic recovery by driving away wealth and talent. They fear the higher tax rate could backfire, resulting in lower revenue generation.
The tax proposal comes amid a global trend of increasing cryptocurrency taxes.
Countries like India have already imposed similar regulations, with a 30% tax on crypto sales and an additional 1% levy on every transaction.
Some experts worry that other European nations, including the UK, might follow Italy’s example as governments seek to recover from economic challenges.
