Italy’s government has taken steps to reduce the proposed increase in the cryptocurrency capital gains tax from an initial 42% to 28%. The League, one of Prime Minister Giorgia Meloni’s ruling coalition partners, has proposed the amendment in this regard.
This comes after concerns that the higher tax could discourage investment in Italy’s fast-growing digital asset market. The amendment supported by Prime Minister Meloni’s administration is expected to attract both the crypto investors and businesses within Italy and is the League’s amendment.
Italy Poised to Water Down Proposed 42% Tax on Crypto Trading
“We believe that such a tax isn’t right,” said the Forz Italia whip. “Going from 26% to 42% has a reason that isn’t widely understood by anyone.” pic.twitter.com/LdmvyUMphs
— matthew sigel, recovering CFA (@matthew_sigel) November 12, 2024
The initial plan of a 42% tax increase that was proposed in the October budget draft was to increase revenue as part of the 2025 economic plan. However, the high tax rate that was introduced elicited fear in Italy’s competitiveness in the global cryptocurrency market.
Industry representatives stated that a 42% tax rate could negatively impact Italy’s appeal for crypto-related business, which includes blockchain, digital asset trading, and investment. They claimed that a lower rate would assist Italy in preserving its attractiveness to both local and foreign investors. This would additionally foster the growth of the country’s financial innovation sector.
With the proposed amendment, the 28% tax rate helps Italy come closer to its current levy of 26%, thus reducing the tax pressure on crypto investors. This tax policy now awaits the approval of the government and it is expected to be approved soon. If the amendment is approved, investors in cryptocurrencies in Italy will get a clear and, perhaps, favorable set of rules.
Another coalition partner, Forza Italia, has also put forward another amendment to totally remove the tax increase. This proposal also aims at removing the current exclusion of capital gains tax on income not exceeding $2,120.
This is a developing story
Source: https://www.cryptopolitan.com/italy-lowers-proposed-crypto-tax-hike-to-28/