Italy Cuts Crypto Tax To 28% Sparking Optimism For Investors

The Italian government is reportedly advancing a proposal to reduce the planned increase in crypto capital gains tax to 28%, a move anticipated to support investor interest. The League, a key member of Prime Minister Giorgia Meloni’s coalition, has submitted an amendment to cap the proposed tax rate at 28% rather than the initially suggested 42% outlined in the October budget draft.

Italian Government Cuts Proposed Crypto Tax to 28% From 42%

According to sources, Prime Minister Giorgia Meloni’s administration is likely to back the League’s amendment, which could mark a shift toward more favorable crypto policies in Italy. The initial proposal to raise the tax rate to 42% was part of a broader economic plan aimed at increasing revenue for the 2025 budget.

However, industry representatives expressed concerns that such a high rate would make Italy less attractive for cryptocurrency-related activities and investments.

The League’s amendment suggests a compromise, setting the tax rate at 28%, which would still be above the current 26% but considerably lower than the initially planned 42%. Sources close to the government have noted that further adjustments to the proposal are still possible before it receives final approval.

Coalition Proposals Aim to Address Investor Concerns

In addition to the League’s amendment, Forza Italia, another coalition party, has proposed separate adjustments. This proposal seeks to scrap the crypto tax increase altogether and eliminate the current tax exemption for gains below €2,000. Both proposals suggest a willingness within Italy’s governing coalition to reconsider tax policies to attract and retain digital asset investments.

Moreover, the League’s proposal includes establishing a permanent working group with representatives from digital-asset firms and consumer organizations. The objective is to promote transparency and provide resources to educate investors about crypto tax. 

Although no final decision has been made, sources close to the matter suggest that the government may lean towards adopting the League’s amendment as part of the finalized budget.

More so, finance Minister Giancarlo Giorgetti indicated flexibility regarding the crypto tax. He suggested that Italy might consider differentiated taxation based on investment duration. This proposal could offer investors favorable conditions if they hold digital assets for extended periods.

The Ministry has acknowledged the need for a balanced approach that considers both revenue generation and the country’s competitiveness. 

This tax adjustment comes as the country works to stabilize public finances under European Union guidelines. Similar tax policies have been implemented globally, with mixed results. For example, India’s recent cryptocurrency tax raised concerns among investors, leading many to shift to overseas exchanges. 

In a related update earlier this month, Detroit announced plans to allow residents to pay taxes in cryptocurrency by mid-2025. Partnering with PayPal for secure transactions, Detroit aims to become a leader in blockchain applications within public services.

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Ronny Mugendi

Ronny Mugendi is a seasoned crypto journalist with four years of professional experience, having contributed significantly to various media outlets on cryptocurrency trends and technologies. With over 4000 published articles across various media outlets, he aims to inform, educate and introduce more people to the Blockchain and DeFi world. Outside of his journalism career, Ronny enjoys the thrill of bike riding, exploring new trails and landscapes.

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