Minister Giorgetti Faces Backlash Over Cryptocurrency Tax Increase

Italy’s Economy Minister, Giancarlo Giorgetti, defended his decision on Thursday to increase taxes on cryptocurrency capital gains in next year's budget, despite facing opposition from members within his own party.

Giorgetti stated that savers need to distinguish between investments that contribute to tangible economic projects and cryptocurrencies, whose value, he argued, is largely disconnected from any underlying asset. “Cryptocurrencies present a very high level of risk,” he remarked during a speech at a banking conference in Rome.

Under the proposed 2025 budget, which must be approved by parliament by the end of December and remains subject to modification, the Treasury plans to increase taxation on capital gains from cryptocurrencies such as Bitcoin from 26% to 42%. The tax hike is expected to yield an additional 16.7 million euros ($18.16 million) annually, up from the current 27 million euros.

Despite the relatively modest revenue expected from this measure, particularly when compared to Italy's total budget expenditure of over 800 billion euros, the proposal has drawn criticism within Giorgetti's own League party. Lawmaker Giulio Centemero labeled the tax increase as "counterproductive," urging the government to engage in meaningful dialogue with market stakeholders.

Italy’s plans coincide with the European Union's implementation of the Markets in Crypto-Assets (MiCA) regulation, the first comprehensive regulatory framework for cryptocurrencies. MiCA requires crypto firms to obtain EU authorization to operate within the bloc and adhere to strict measures aimed at preventing money laundering and terrorism financing.

($1 = 0.9196 euros)