Italy’s lawmakers are opposing government plans to increase capital gains taxes and widen the scope of its crypto assets. The proposals, central to Prime Minister Giorgia Meloni’s 2024 budget, are being criticized for potentially stifling innovation and affecting smaller businesses.
Push for Crypto Tax Compromise
Economy Minister Giancarlo Giorgetti proposed raising cryptocurrency capital gains taxes from 26% to 42%, aligning them with other financial income. However, some members of his ruling coalition are reportedly opposing the steep hike and suggesting capping the tax increase at 28%, Reuters reported.
Amid the internal rift, Giorgetti has signaled a willingness to reconsider, exploring alternative taxation structures to resolve the disagreement. Debates also center on Italy’s digital tax, a levy introduced in 2019 targeting tech giants like Meta, Google, and Amazon. This restriction aims to strike a balance between generating revenue and maintaining market competitiveness.
⚡️JUST IN: 🇮🇹 Italy is reportedly considering raising its capital gains tax on #Bitcoin and other cryptos from the current 26% to as high as 42%.@paoloardoino, any chance you can stop this? 🤨 pic.twitter.com/v7cvpWiDyY
— Satoshi Club (@esatoshiclub) October 16, 2024The current 3% tax applies only to firms with annual global revenues above €750 million and Italian revenues exceeding €5.5 million. The Treasury’s proposal to remove these thresholds has sparked concerns about the impact on small and medium-sized enterprises. In response, the Forza Italia party, part of the ruling coalition, has introduced an amendment to preserve these revenue floors.
Lawmakers argue that the thresholds prevent undue financial strain on SMEs while focusing the tax burden on large multinational corporations. Supporters of the expanded digital tax argue it could strengthen Italy’s fiscal position. However, opponents warn of potential diplomatic tensions with the United States, which has criticized such levies as discriminatory against American companies.
Balancing Revenue and Diplomacy
Supporters of the expanded digital tax argue it could strengthen Italy’s fiscal position. However, opponents warn of potential diplomatic tensions with the United States, which has criticized such levies as discriminatory against American companies. Giorgetti has acknowledged these challenges, suggesting that maintaining targeted measures could help avoid further disputes.
The latest development about crypto taxes in Italy followed a recent market rally that drove the crypto market to a historic high. The rally pushed the price of Bitcoin to an all-time high of more than $93. Another key trend in the space was the surge of spot bitcoin ETFs.
Last month, Deputy Finance Minister Maurizio Leo disclosed plans to increase crypto taxes, highlighting that the initiative was a response to Bitcoin's increasing popularity. Other countries, including India, have attempted to take similar steps in the past but have yet to record a significant increase in revenue.
This article was written by Jared Kirui at www.financemagnates.com.
