Italy intends to increase the capital gains tax on Bitcoin from 26% to 42%.

During a news conference at Palazzo Chigi on October 16, Deputy Finance Minister Maurizio Leo discussed the country’s new budget bill, which has been approved by the Council of Ministers. He noted that Prime Minister Giorgia Meloni’s cabinet took this step in response to the growing popularity of Bitcoin.

Italy’s Crypto Tax Hike

The proposed rise in tax rates could place Italy among the top countries in terms of cryptocurrency taxation worldwide. The latest decision has sparked a significant backlash from both investors and industry advocates.

Many have even ridiculed the Italian government for its proposed tax increase on cryptocurrencies, arguing that the rationale of taxing heavily simply because these assets have gained popularity is both absurd and short-sighted.

One user said,

“Italy is in collapse. How can we encourage the proliferation of new realities like bitcoin and crypto? Raising the already ridiculous 26% tax up to 42%. If you think about coming to live in Italy, please don’t do it. Every day that passes I always find one more reason to leave.”

Critics also pointed out that this approach not only reflects a lack of understanding of the evolving crypto industry but also risks driving investors away. As the tax burden intensifies, crypto players may seek to relocate or explore alternative investment opportunities in friendlier jurisdictions, potentially stifling innovation and investment within Italy.

The Italian government had previously introduced a 26% tax rate on profit