Italy is set to significantly increase the capital gains tax on Bitcoin, raising it from 26% to 42%. This move is part of the government’s efforts to finance costly election promises while reducing the fiscal deficit.
Prime Minister Giorgia Meloni’s cabinet approved the tax hike, citing the growing popularity of Bitcoin and other cryptocurrencies. Deputy Finance Minister Maurizio Leo stated during a conference call on Wednesday that the “phenomenon is spreading.”
While Italy is joining a growing number of countries implementing stricter regulations on cryptocurrencies, the effectiveness of such measures remains uncertain. India’s imposition of hefty digital-asset levies two years ago resulted in a decline in trading volumes as investors sought to avoid the taxes by using offshore platforms.
The announcement of Italy’s increased capital gains tax comes as the European Union prepares to fully implement its comprehensive crypto regulations, known as MiCA, by the end of this year. Despite the regulatory tightening, Bitcoin’s price has continued to rise, with a 1.8% increase as of 12 p.m. in London on Wednesday. The cryptocurrency has seen a 17% surge in the past month.
