As a seasoned financial analyst with over two decades of experience under my belt, I find myself observing Italy’s latest move to raise capital gains tax on cryptocurrencies like Bitcoin with a mix of intrigue and understanding.
Giancarlo Giorgetti, Italy’s Minister of Economy and Finance, has countered criticism by defending his proposal to increase the capital gains tax on digital assets such as Bitcoin to 42%.
During the World Savings Day gathering on October 31st, Giorgetti expressed that digital assets carry an “extremely high level of risk,” supporting the government’s move to adjust capital gains tax. In response, Italy’s Council of Ministers has passed a bill to raise withholding taxes for Bitcoin (BTC) from 26% to 42%.
The planned increase in taxes on crypto transactions is yet to receive approval from Italian legislators and may not come into effect until they’ve made their decision. Giulio Centemero, a representative of Italy’s Chamber of Deputies, recently expressed his view in an Oct. 16 post that taxing cryptocurrencies might be detrimental. He suggested that the matter needs more debate among legislators.
Based on the proposed budget, it’s anticipated that the Italian government could gather approximately $18 million per year following an increase in the cryptocurrency tax rate. In the year 2023, legislators boosted the capital gains tax on crypto trades exceeding 2,000 euros to 26%, which is part of a broader budget strategy.
MiCA set to go into effect
Even as part of the European Union, Italy would need to adhere to the Markets in Crypto-Assets (MiCA) regulations, which were established by EU lawmakers and are scheduled to commence for crypto asset service providers in December. While this regulatory framework may not directly impact a government’s capacity to impose taxes on cryptocurrencies, its primary purpose is to regulate stablecoin issuers, safeguard exchange users, and combat market manipulation.
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2024-10-31 19:48