Italy’s government has recently announced a change in plans regarding a proposed tax increase on crypto capital gains, as reported by Reuters on Dec. 11. The initial proposal, which was part of the 2025 budget, aimed to raise the tax rate on crypto gains from 26% to 42% in order to generate additional revenue. However, after facing criticism from industry stakeholders and divisions within the ruling coalition, the government has decided to scale back the proposed increase.
Lawmakers Giulio Centemero and Treasury Junior Minister Federico Freni, both from the League party, confirmed on Dec. 10 that the tax increase would be “significantly reduced” during parliamentary deliberations. The revised budget proposal, which includes a softened stance on crypto taxation, is expected to be finalized and presented to parliament for approval by the end of December. Lawmakers are under pressure to find a balance between fiscal responsibility and supporting the growing digital asset industry.
Critics of the proposed tax hike have warned that it could drive crypto investors and businesses into the shadow economy, leading to a lack of transparency and hindering economic growth. Centemero and Freni emphasized the need for balanced regulation that promotes innovation and market participation, rather than discouraging it with excessive taxes.
There have been divisions within the ruling coalition regarding the tax hike, with Economy Minister Giancarlo Giorgetti initially supporting the increase. However, members of his own party have resisted the measure, arguing that a more moderate approach would be more in line with Italy’s economic goals. The League party, known for its pro-business stance, has raised concerns about the potential negative impact of the tax hike on Italy’s emerging digital asset sector, urging a strategic reevaluation of the policy.
Ultimately, the government may choose to maintain the current 26% tax rate on crypto gains, reflecting the broader concerns within the coalition about the consequences of implementing a higher tax rate. The debate over the tax increase highlights the delicate balance that policymakers must strike between generating revenue and supporting innovation in the digital asset industry.