Giancarlo Giorgetti, the Italian Minister of Economy and Finance, has pushed back against critics of a plan to raise the country’s capital gains tax on cryptocurrencies like Bitcoin to 42%.

At a World Savings Day event on Oct. 31, Giorgetti said digital assets presented a “very high level of risk,” defending the government’s decision to change the capital gains tax. Italy’s Council of Ministers approved a budget bill to increase withholding taxes for Bitcoin ( BTC ) from 26% to 42%.

Italian finance minister Giancarlo Giorgetti at World Savings Day on Oct. 31. Source: YouTube

The proposed tax hike is still subject to review and approval by Italian lawmakers before implementation. Giulio Centemero, a member of Italy’s Chamber of Deputies, said in an Oct. 16 X post that taxing cryptocurrencies would be “counterproductive,” calling for further discussion among lawmakers.  

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According to the proposed budget, the Italian government hopes to collect roughly $18 million yearly after raising the crypto tax rate. In 2023, lawmakers increased the capital gains tax on crypto trading for more than 2,000 euros to 26%, also as part of a budget plan.

MiCA set to go into effect

As a member of the European Union, Italy would still be subject to the Markets in Crypto-Assets (MiCA) framework passed by EU lawmakers and set to go into effect for crypto asset service providers in December. Though the regulatory framework will likely not affect a government’s ability to tax crypto, it aims to regulate stablecoin issuers, protect exchange users, and crack down on market manipulation. 

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