The Italian government may abandon the plan to increase the tax on cryptocurrency profits from 26% to 42% after reactions from the industry and the internal division of the ruling coalition.
The Italian government is reconsidering the plan to increase taxes on profits from cryptocurrencies after facing strong opposition from stakeholders in the industry and divisions within the ruling coalition.
The initial proposal, introduced as part of the 2025 budget, aimed to increase the tax on profits from cryptocurrencies from 26% to 42%. The government's goal was to generate an additional €16.7 million in annual revenue for the national budget.
However, this figure, although relatively small compared to the total budget, has sparked fierce debate. Economy Minister Giancarlo Giorgetti, who initially strongly supported this proposal, is now facing pressure from members of his own party.
The League party, a key member of the ruling coalition and known for its pro-business stance, has spoken out against the tax hike plan, arguing that it will be detrimental to the development of the young cryptocurrency industry in Italy.
League lawmakers Giulio Centemero and Deputy Finance Minister Federico Freni confirmed on December 10 that the tax increase will be significantly reduced after discussions in parliament. According to political sources, the government may decide to maintain the current 26% tax rate to alleviate concerns about the potential negative impact of the policy on the digital asset industry.
Pressure to balance finance and innovation
Critics of the proposed tax hike warn that a sudden increase in taxes will push cryptocurrency investors and businesses into "underground" activities, undermining transparency and hindering economic development.
They argue that a stable and competitive legal environment is necessary to attract investment and drive innovation in this field. Centemero and Freni called for a balanced regulation that encourages creative innovation rather than hindering market participation, and affirmed that Italy will no longer accept "prejudices against cryptocurrencies".
The League party argues that a less aggressive approach would be more in line with Italy's broader economic goals. They warn that the country will lose its competitive edge if it chooses to "punish innovation" and call for a more cautious and flexible policy adjustment strategy. Balancing the government's financial needs and creating a favorable environment for the development of the cryptocurrency industry is a major challenge for policymakers in Italy.
The revised budget draft, including adjustments to the cryptocurrency tax stance, is expected to be finalized and submitted to parliament for approval by the end of December.
