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In these times of austerity governments and municipalities need to be ever more creative in the way they raise taxes. Any new tax collection scheme needs to pay its way – there is little point in introducing a tax which then requires excessive resources to be policed and collected. Bonn like many other modern cities faces these same challenges. Ever since reunification when the German Parliament decided to move from Bonn to Berlin the city has had to stand on its own two feet and balance its books.

Having been a great ‘government’ city Bonn has inherited some of the most creative minds in Europe when it comes to fiscal innovation. The city elders looked to the examples of ancient Rome for taxing inspiration and were not disappointed. When you need additional taxes it is a good idea to start looking at the things which are a titsy bit naughty (or as the Romans used to say you need a “vectigal ex capturis”).

One year ago Bonn introduced its first self-service sex-permit machine on the city’s official ‘street walkers patch’ (Straßenstrich). This allows ladies (and presumably gentlemen) interested in pursuing financially reimbursed romantic activities to obtain a city sex permit at the beginning of their evening shift. The fee of 6 euros covers the tax due from sexual transactions between 8:15 p.m. and 6:00 a.m. the next morning. The one-night sex license equipment is a specially adapted self-service parking permit machine.

From the research I have carried out I am not sure if the permit allows you to be involved in financially reimbursed romantic activities once you leave the Bonn city limits. I would recommend that any readers concerned about their tax position for such activities outside of Bonn should contact the appropriate tax authorities to satisfy themselves regarding local levies for sex (I am not a qualified sex tax advisor and do not claim any personal experience in the area of fiscal relationship permitting).

In its first year the sex permit machine has collected 35,200 euros for the metropolitan tax authorities. This turnover resulted from issuing 5870 sex permits. It would appear that the authorities also issued 27 fines and warning charges to people who were offering financially reimbursed romantic activities without the appropriate city permit (known locally as a “Verkehrsticket”). Currently about 15 ladies per night are offering their fiscally permitted services to passers-by on the Bonn street walkers patch.

This is not the first fiscal innovation that Bonn has introduced for this line of business. At the beginning of 2011 the city introduced a Brothel Tax. This resulted in tax revenues for the city during the full fiscal year of 2011 of 250,000 euros. In the first half of 2012 these licensed premisses for financially reimbursed romantic activity have already earned the city 220,000 euros. Therefore despite the recession this appears to be a growth area. One of the advantages of the pre-paid City Sex Permits from the automated ticketing machines is that the people offering these romantic services are not required to fill in complicated tax collection forms; many of the people involved in this industry are from outside of Germany and struggle when completing such paperwork.

Of course as well as the revenue from fiscally licensed sexual activities the city also has some costs. The conversion of the parking ticket machine cost about 4000 euros. The Bonn tax authorities have taken on a couple of additional people to support their sex tax collection activities. The City also provides appropriate security support to the ladies (and presumably gentlemen) around the street walking area and they have also installed suitably screened parking bays to allow business transactions to be discussed in private (referred to by the officials as ‘Verrichtungsboxen’).

The German Süddeutsche Zeitung article in the link here was used as a starting point for some of the information featured above.

As our friends in Germany like to say ‘Vorsprung durch Technik’ (jumping a head with technology)

Chris Duggleby

If you are interested in similar articles to this one please take a look at the archive which is here. The city of Cologne has also been innovative in taxing sex with its first multi-story state approved brothel. More info about this subject can be found here.