Without entering into any moral debate. I'm just trying to help you with the information I know.
As I already told you, tax withholding is a legal issue for Itch because Itch is a US store.
It is not an issue that Itch wants you to pay taxes in the USA, it is an issue that it is obliged to report profits to the IRS.
We may like it or not, but the moment you accept Itch's conditions and fill out a US tax form, you are accepting those rules and there is no way around them.
The alternative is to sell the game in a store that is not located in the USA, and if you want to avoid double taxation, it should be a store in your country of legal residence or in a country that has a tax treaty with your country.
Again, I'm not sure if the "direct pay to you" mode It would allow you to do what you want. And I don't want to give you any advice that could be a legal problem for you, better consult directly with support or a lawyer.
https://itch.io/docs/creators/payments#payment-modes/direct-to-you