Italy plans to raise the capital gains tax on Bitcoin from 26% to 42% as part of an effort to finance costly election promises while closing its fiscal deficit.
Prime Minister Giorgia Meloni’s cabinet made the decision as Bitcoin continues to gain popularity, with Deputy Finance Minister Maurizio Leo citing the widespread adoption of BTC during a conference call on Wednesday.
Previous attempts by other countries to tax cryptocurrency trading have not always been successful in raising government revenues. For example, India imposed heavy taxes on digital assets two years ago, which led to a significant drop in trading volumes as local investors moved their operations offshore to avoid taxes.
The announcement from Italy comes as the European Union prepares to fully implement comprehensive cryptocurrency regulations under its Markets in Crypto Assets (MiCA) framework, which will come into force at the end of the year. Despite the tax news, Bitcoin’s value has remained resilient, with the BTC price trading at $67,700 at the time of writing.
*This is not investment advice.
