Italy’s Capital Gains Tax on Bitcoin Soars to 42%, Shocks Investors

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The Italian administration has suggested increasing the capital gains tax on Bitcoin and other cryptocurrency earnings from 26% to 42%, surprising many local investors.

This tax increase is part of the government’s budget proposal for 2025, aimed at generating additional revenue to enhance public services. Deputy Minister Maurizio Leo stated during a press briefing that this measure is essential to address the nation’s budget deficits.

Crypto Capital Gains Tax Could Be Among The Highest In Europe

If enacted, this tax would rank as one of the highest in Europe concerning cryptocurrency earnings, resulting in significant backlash from the community on various social media platforms.

“Raising taxes is a detrimental move that only serves to diminish wealth and stifle new initiatives,” remarked macro trader and investor Jason Pizzino on X. “Italy is on a path to decline.”

Italy is on a path to decline. It’s a stunning museum in real life to explore as a tourist. Just so you know, I hold Italian citizenship. I adore the country. However, raising taxes on Bitcoin means nothing, because net wealth is exiting Italy instead of being drawn in. Raising taxes is a dreadful move as that… https://t.co/9PCir8uvRq

— Jason Pizzino (@jasonpizzino) October 16, 2024

Analytics data from on-chain monitoring service Santiment indicates that discussions surrounding the terms “Italy” and “tax” surged to monthly peaks as cryptocurrency users, notably those based in Italy, voiced their apprehensions regarding the proposed changes.

However, previous efforts by other countries to impose taxes on cryptocurrency gains have often not resulted in increased government income. For instance, when India implemented a tax on digital assets a few years back, trading volumes plummeted as investors shifted to offshore platforms.

Bitcoin Price Experiences Bearish Sentiment In Italy

Furthermore, Santiment’s data reveals a surge in bearish sentiment within the cryptocurrency market following Italy’s tax proposal. The social volume for keywords such as “Italy+sell”, “Italy+sold”, “Italy+bearish”, etc., spiked significantly.

Nonetheless, the price of Bitcoin remained mostly stable. As of 04:06 a.m. ET, BTC is priced at $67,379, reflecting a minor decline of approximately a third of a percent within the past 24 hours, based on data from CoinGecko.

The proposal is subject to parliamentary approval before it can take effect.

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