The Netherlands will start collecting income taxes from prostitutes this year. Tax inspectors have started to make visits to over 3000 of the country’s prostitutes in order to talk to sex workers about the average number of clients they serve each day, and how much the sex workers charge per visit, in order to make an estimate about the salary range of the prostitutes.
Sex workers are viewed as independent contractors in the Netherlands, and they have not been required to pay income taxes in the past. But Holland is feeling the economic crunch as badly as the rest of the world, and this is no doubt a very practical approach to generating tax revenue. According to the Dutch newspaper Parool:
Prostitutes in Amsterdam did not pay income tax on humanitarian grounds. The taxman always left them untouched. The reasoning was that prostitutes were in fact victims of trafficking, and all were exploited by pimps, and that taxes would cause another form of exploitation. Such leniency was towards both Dutch and foreign prostitutes, but Dutch women were generally treated less leniently than victims of trafficking from Eastern Europe. The new taxes will be equally applied . . .
The City of Amsterdam believes that the exploitation of women still occurs in prostitution, but the Treasury now considers it high time prostitutes to start treating as ordinary taxpayers. (Please excuse any errors in translation.)
This story fascinates me. Prostitution is legal in the Netherlands, and it is highly regulated. Sex workers must register with the government, they are issued a registration pass, and clients may ask to see a prostitute’s pass. This is a result of the Dutch paradigm of “harm reduction.” The Dutch generally accept that people are going to have sex with prostitutes. By legalizing and regulating sex work, the government is better able to control the environment surrounding it. Moreover, Holland has nationalized health care. It is in the country’s best interest to ensure that sex workers are regularly checked for STI’s, especially if the government is going to pick up the tab if a sex worker or a client gets sick.
This is not to say that everything is fine and dandy in the Netherlands. Because of the prevalence of brothels and sex tourism in Holland, sex trafficking is very common. It seems like sending tax inspectors into the brothels to talk to sex workers is one way of keeping tabs on the working conditions, and making sure that the brothels are operating above board. This is a very Dutch approach to addressing criminal activity.
What do you think of this story? Should sex workers be required to report their wages? Do you think that they will give an honest reporting of their earnings? How many hairdressers or waiters give an honest report of their tips? I would be willing to bet money that the sex workers will under-report their earnings. Until the brothels start issuing customers a receipt for their hand jobs, there is no way to accurately report and tax the income.
That’s just my opinion, though. What do you think?