The Italian government has announced plans to scale back a proposed tax increase on crypto capital gains after criticism from industry stakeholders and divisions within the ruling coalition, Reuters reported on December 11.
The original proposal, introduced as part of the 2025 budget, aimed to increase the tax rate on crypto profits from 26% to 42%, a significant jump aimed at generating additional revenue.
However, lawmakers Giulio Centemero and Deputy Finance Minister Federico Freni, both from the co-ruling League party, confirmed on December 10 that the increase would be “significantly reduced” during parliamentary deliberations.
The revised budget proposal, including the softened position on crypto tax, is expected to be finalized and submitted to parliament for approval by the end of December. Lawmakers are under pressure to strike a balance between cautious fiscal policy and promoting a supportive environment for the fast-growing digital assets industry.
Economic impact
Critics of the proposed increase warned that it would push crypto investors and companies into the shadow economy, undermining transparency and economic growth.
Centemero and Freni said in a joint statement that the country would no longer allow “bias against cryptocurrencies” and called for balanced regulation that promotes innovation rather than discouraging market participation.
Political insiders told the newswire that the government could ultimately decide to keep the current 26% tax rate intact, reflecting broader concerns within the coalition about the potential impact on Italy’s emerging digital asset sector.
Division in the ruling coalition
Economy Minister Giancarlo Giorgetti initially supported the proposed tax increase, but his own party members opposed it.
Giorgetti described the measure as a way to generate around €16.7 million annually for public finances. Despite its relatively modest contribution to the national budget, the plan sparked heated debates within the government over its potential to stifle innovation and deter investors.
The League party, known for its pro-business stance, argued that a less aggressive approach would better align with Italy’s broader economic goals. It argued that the country would lose its competitive advantage if it chose to “punish innovation” – and urged a strategic rethink of the policy.