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Long times are expected for the approval of Italy’s financial maneuver, which includes the increase of taxation on crypto capital gains.
The Ministry of Economy and Finance (MEF) has presented its final draft of the budget law for 2025 to Parliament, but this text has already raised several doubts.
Summary
The approval process of Italy’s financial maneuver for the tax increase on crypto
The approval process of Italy’s financial maneuver requires that the MEF presents it to the Parliament, but it also requires that the Parliament must approve it.
The Italian Parliament is divided into two chambers, so the approval of both chambers will be required.
The text presented by the MEF to Parliament, however, is not necessarily the final one. At the current state, it is a definitive draft released by the MEF, which Parliament can still modify.
It should be remembered that the current Italian government, of which the MEF is obviously a part, is supported by a large and overwhelming majority in Parliament, so it is practically certain that the maneuver will eventually be approved.
It seems, however, equally certain that the Parliament will amend the draft presented by the MEF, so much so that the final text that will be approved by the Parliament, and will become law of the State, will most likely be different from the current draft.
The timing
For the final approval of the 2025 budget law, there is time until December 31, 2024.
It is not uncommon in Italy for the budget law for the following year to be approved by Parliament on the very last possible day.
This year it was actually believed that, given the large majority supporting the government, the timeline could be tighter, but since last year the situation was similar from this point of view, and the final approval only came on December 31, it is reasonable to expect that this year it might also only arrive at the end of December.
The hypothesis that is circulating is that there will not be enough time for an approval before Christmas.
Since December 26 is a holiday in Italy, and given that December 28 and 29 are Saturday and Sunday, the approval could arrive between Monday 30 and Tuesday 31.
The emendamenti
The text of the maneuver presented by the MEF to Parliament has 14 articles, with many paragraphs.
In theory, every single paragraph could be subject to amendment.
The latest news suggests that several amendments are likely, given that there are many parliamentarians who are opposed to many clauses of that text.
It should be remembered, however, that to amend even just a single clause requires the approval of the majority of Parliament, and the majority of the Italian Parliament currently supports the government, and therefore also indirectly the MEF.
However, even among the ranks of the majority, there are those who are dissatisfied with this maneuver, either because in some cases they consider it too conservative, or because in other cases they find it too oppressive.
Many amendments will therefore presumably be proposed, the discussions and votes of which will take a lot of time. Hence the forecast according to which there cannot reasonably be final approval before Christmas.
The amendment to the increase of crypto taxes
The article that contains the increase in taxation on crypto capital gains from 26% to 42% is number 4, specifically paragraph 2.
This paragraph essentially states one thing, namely that starting from January 1, 2025, any capital gains generated from the sale of criptovalute will no longer be taxed by the Italian State at 26%, like those generated from other financial assets, but at 42%.
This is a significant increase that would very likely risk sinking the entire Italian crypto sector, effectively handing over Italian crypto capital to more tax-friendly nations, such as nearby Switzerland.
It is not a coincidence that the second largest political force currently present in Parliament among the ranks of the majority, Matteo Salvini’s Lega, has promised to present an amendment to paragraph 2 of article 4.
In fact, the party has more or less unanimously expressed itself against this measure.
Italy: the probabilities of success of the financial maneuver for the increase of crypto taxes
The problem is that the Lega alone is absolutely not able to have an amendment approved by Parliament.
The possibilities are two.
Either the Lega manages to convince the rest of the majority to vote in favor of the amendment. Or it convinces the opposition to vote together with it.
Alternatively, the amendment will not be approved, and the increase to 42% will remain.
However, it is very difficult to imagine that the Lega could actually be supported by the opposition in this initiative, so either the majority will vote for that amendment, or it is very difficult for it to pass.
Elimination or modification
However, it should be remembered that the amendment can remove paragraph 2 from article 4 of the text of the financial maneuver, or modify it.
In this regard, another problem arises.
The measure of the increase in crypto taxation to 42% was announced by the Deputy Minister of the MEF Maurizio Leo in a public press conference.
Leo belongs to the main governing party, Fratelli d’Italia of Giorgia Meloni, and it would therefore be particularly strange if his party decided to eliminate a regulation announced by his deputy minister at a press conference.
Furthermore, the Minister of Economy, Giancarlo Giorgetti, belongs to the Lega, so it is even difficult to imagine that the Lega itself would end up presenting an amendment to eliminate a clause approved by its own minister.
However, the possibility remains in play that the amendment may modify that paragraph, for example by replacing the 42% percentage with a lower one.
In other words, the two most likely scenarios seem to be the one where the measure remains intact in the maneuver, and the one where it remains but with a reduced percentage. It seems very difficult, however, for the measure to be completely removed.
At this point, the question is: what percentage reduction will the Lega propose? As of today, it is not known.