Italy is considering a significant hike in its capital gains tax on Bitcoin, raising it from 26% to 42%, according to Deputy Economy Minister Maurizio Leo. The proposal, part of the new budget bill approved by the Council of Ministers, could have a major impact on crypto investors in the country.

In an Oct. 16 press conference, Leo explained that the increase in the tax is a move to align with other budgetary adjustments, including removing the minimum revenue requirement for Italy’s Digital Services Tax (DST). The DST, introduced in 2019, currently targets companies earning at least 750 million euros globally and 5.5 million euros in Italy through digital services. The new bill eliminates these thresholds, broadening its scope.

The proposed capital gains tax hike is part of a larger budget aimed at funding public services. Italy’s government has also approved a 30 billion euro ($33 billion) budget for 2025, partially funded by a levy on banks and insurers. Prime Minister Giorgia Meloni announced plans to raise 3.5 billion euros from financial institutions to support healthcare and vulnerable citizens. Despite the higher tax on Bitcoin, Meloni reassured citizens that there will be no new taxes for individuals.

Italy's Senate had already increased the capital gains tax on crypto trades over 2,000 euros to 26% in late 2022, but this new proposal could push the burden on crypto investors even higher. The final vote on the budget is expected by the end of the year.