Italy has announced plans to raise the capital gains tax on Bitcoin from 26% to 42%. This move aims to increase government revenue and manage the budget.

Details of Tax Increase

Deputy Finance Minister Maurizio Leo stated that the tax increase responds to the growing use of Bitcoin. The government aims to extract more revenue from this phenomenon to fulfill election promises.

Global Context of Crypto Taxation

Different countries' approaches to crypto taxation have shown mixed results. For example, India's high tax led to a drop in trading volumes as investors moved to offshore platforms to avoid taxes. Italy observes international experiences to anticipate potential outcomes.

New EU Regulations and Market Impact

Italy's tax hike coincides with the EU's introduction of new crypto regulations known as MiCA. These rules aim to create a more structured environment for digital assets in Europe, set to take effect by the end of 2024, ensuring transparency and clear guidelines for businesses and investors.

Despite the tax increase, Bitcoin's value continues to rise. By midday in London on Wednesday, Bitcoin was trading 1.8% higher, with a 17% increase over the past month.