Italy plans to raise the capital gains tax on Bitcoin to 42% from 26%
• The move is part of efforts to finance expensive election promises while cutting the fiscal deficit
• The phenomenon of Bitcoin is spreading, according to Deputy Finance Minister Maurizio Leo
The Italian government plans to raise the capital gains tax rate on Bitcoin from 26% to 42%. This is part of an effort to finance election promises while also cutting the fiscal deficit.
Tax Increase Aimed at Curbing Bitcoin Trading
Deputy Finance Minister Maurizio Leo announced the tax increase during a conference call on Wednesday. He said the move is in response to the growing phenomenon of Bitcoin trading and ownership.
Election Promises and Deficit Reduction
Prime Minister Giorgia Meloni‘s cabinet pushed for the tax hike. The goal is to generate additional revenue to pay for expensive election promises made by Meloni’s coalition.
At the same time, the government wants to cut the overall fiscal deficit. Raising the Bitcoin capital gains tax is seen as one way to increase revenue while also discouraging speculation in cryptocurrencies.
Bitcoin Trading on the Rise in Italy
Leo specifically cited the spreading phenomenon of Bitcoin trading and ownership in Italy as one reason behind the tax increase.
Italy has seen growing interest in cryptocurrencies over the past few years. The rising prices of Bitcoin and other coins have attracted both individual and institutional investors.
Tax Rate Much Higher Than Other Assets
The new 42% tax rate on Bitcoin capital gains is much higher than that on other financial assets. For example, the tax on capital gains from selling stocks and bonds is 26%.
By significantly increasing the tax on Bitcoin profits, the government aims to curb speculative trading. However, critics argue the move could simply push investors to trade on foreign exchanges instead of Italian platforms.
