Politicians from Italy’s ruling coalition said Tuesday that the country will lower the proposed tax hike on cryptocurrency capital gains following industry criticism and internal disagreements.
What Happened: Lawmaker Giulio Centemero and Treasury Junior Minister Federico Freni, both from the co-ruling League party, announced that the proposed tax increase would be “significantly reduced during the parliamentary work,” according to a Reuters report.
“No more prejudices about cryptocurrencies,” Centemero and Freni asserted. There was speculation that the government might keep the current rate unchanged, Reuters said, citing political sources.
The Ministry of Economy and Finance of Italy didn’t immediately respond to Benzinga’s request for comment.
See Also: Microsoft Shareholders Reject Proposal To Explore Bitcoin Investment
Why It Matters: The Treasury had initially planned to increase the tax on cryptocurrency capital gains from 26% to 42% under the 2025 budget, which is due to be approved by parliament by the end of December. However, the League party expressed concerns that such a move could potentially stimulate the shadow economy.
The proposal, if passed, would place Italy among the most heavily taxed jurisdictions for cryptocurrency gains in the world. The current tax rate aligns with that of traditional financial instruments such as stocks and bonds.
The backpedaling comes after Bitcoin BTC/USD, the world’s biggest cryptocurrency by market capitalization, broke through the $100,000 level for the first time last week.
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