Germany Hopes To Raise 1.4 Billion Euros Through More Efficient Tax On Prostitution

Submitted by Dmitri Davydov on Sat, 2007-05-26 10:11.
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BERLIN: German tax revenues could rise by about 1.4 billion euros a year if there were a more efficient system of taxing prostitutes, whose work is mostly legal, according to an economist.

Richard Reichel estimates sex workers generate about 7 billion euros each year in Germany's "red-light sector" and that most of that goes untaxed.

"About 1.4 billion euros could be expected," Reichel told Friday's Die Welt newspaper about his study "Prostitution – The Unrecognised Economic Factor".

Many prostitutes working outside brothels under-report or do not report income. Few pay taxes.

Reichel, an economist at the university of Erlangen-Nuremberg, said the income tax rate on prostitutes should be on average about 20 per cent. He assumes two-thirds of the prostitutes in Germany have income under 2,000 euros per month.

When the cities of Cologne and Berlin introduced flat daily tax rates on prostitutes revenues soared and German Finance Minster Peer Steinbrueck recently floated the idea of a nationwide daily flat rate tax for prostitutes.

[Via - Stuff]

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