The Italian Treasury has proposed a significant increase in the tax on capital gains from cryptocurrencies, raising it from 26% to 42% as part of the 2025 budget, which Parliament is expected to approve by the end of December 2024.

The Treasury anticipates that this increase will generate an additional 16.7 million euros annually, raising total cryptocurrency tax revenue to approximately 43.7 million euros.

In defense of the proposal, Economy Minister Giancarlo Giorgetti has argued that speculation in cryptocurrencies should be taxed more heavily, despite the pushback from his party.

This tax hike is aimed at boosting revenue to support various initiatives for families, youth, and businesses, while also addressing fiscal deficits in the country.

Giorgetti has also emphasized the importance of establishing a regulated market to monitor cryptocurrencies and prevent fraud and manipulation.

The proposed tax hike coincides with the upcoming adoption of the Markets in Crypto-Assets (MiCA) regulation, which aims to create a uniform regulatory framework for digital assets across the European Union.

However, the proposal has faced criticism from within the ruling League party, with lawmakers like Giulio Centemero labeling the tax increase as 'counterproductive' and calling for more dialogue with market stakeholders.

Despite the modest projected revenue compared to Italy's total budget of over 800 billion euros, the tax increase has sparked significant debate among lawmakers.

Italy's Council of Ministers has already approved the tax increase as part of a broader strategy to strengthen the economy through investment profits.

The final decision on this tax proposal will ultimately depend on further negotiations within the government.

This proposed tax hike comes at a time when Italy has seen a notable increase in cryptocurrency activity, with around 3.6 million Italians now engaging in digital currencies.

As discussions continue, Parliament aims to finalize the budget approval by the end of December 2024.