Source: TaxDAO

According to reports from Reuters and Bloomberg, Italian Deputy Minister of Finance Maurizio Leo stated that the government will increase the capital gains tax on Cryptocurrency such as BTC from 26% to 42%.

According to Bloomberg, the Italian cabinet decided to make this adjustment because the phenomenon of the use of Crypto Assets is spreading, Leo said during a phone call on Wednesday regarding BTC.

This tax increase is part of Italy's efforts to strengthen the digital service tax and aims to increase revenue for the 2025 budget. The price of BTC (BTC) has not been affected by this development, with a weekly increase of over 12%, breaking through $68,000 for the first time since the end of July.

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Italy's move to raise the capital gains tax on Crypto Assets to 42% reflects both the urgent need for modernization of its tax system and the country's complex attitude towards dealing with the digital economy and Cryptocurrency. As the third largest economy in the Eurozone, Italy has long faced the problem of fiscal deficits and high public debt. This tax hike is clearly a necessary measure to make up for the government's insufficient revenue.

Italy is a country highly dependent on the TradFi system. An aging society and conservative financial attitudes may pose certain obstacles to the popularity of Crypto Assets. This significant tax increase may be a conservative strategy of the government in response to the digital economic transformation, attempting to seek a balance between protecting the TradFi order and exploring emerging markets.

What is concerning is that this measure may suppress the activity of the encryption market in Italy in the short term, especially for investors seeking a tax-friendly environment, who may transfer encryption assets to other European countries, resulting in capital outflow from Italy and slowing down the exploration and innovation of Italian companies and individuals in the cryptocurrency field.