The Belgian Council of State has repealed a Liège tax-regulation tripling the amount of taxes paid annually by the city’s hostess bars, Le Soir reports. In Belgium, these establishments are typically venues which mix the sale of drinks with adult entertainment such as striptease, massages, private dances, or prostitution.
In a move against these establishments last year, the city raised taxes on these establishments up to €15,000 annually, citing the detrimental cost of these establishments on the security of the local area and the city’s budgetary needs.
The owners of these establishments said that the excess tax put them between a rock and a hard place. Either they would be forced to close their businesses or increase the rents paid by their sex workers, which is currently forbidden under Belgian law. Prostitution is legal in Belgium, with red-light districts in several major cities, but organised prostitution is illegal, although enforcement varies according to region.
The owners of these establishments first complained about the new tax to the Council of State, with the official auditor giving a positive opinion to the plaintiffs, stating that the city’s tripling of the tax did not have a properly defined motivation. In response to the auditor, the City of Liège edited its tax by-laws to justify the increase in greater detail. The owners then launched a second appeal against the new, updated tax by-law.
The City believes that the owners did not have a legitimate interest in their recourse to the tax changes due to the fact that they were drawing a profit from prostitution, often illegally.
The Council of State rejected the City’s argument, stating that it was not a legally competent defence to declare someone guilty of a crime, disregarding the presumption of innocence, to contest the legitimate interest of the plaintiff. Moreover, the new sexual penal code, adopted shortly before the vote on the hostess bars, no longer makes it an offence to rent property to a prostitute, provided that rent is not “unreasonable.”
Prostitution in the spotlight
The owners of these establishments state that the City’s move was merely an attempt to get rid of the last few remaining bars in Liège which offered prostitution, ending a campaign first launched 15 years ago which closed many venues in the city’s Cathédrale-Nord district. Before the court, they complained of the unpredictability of the measure and that the move violated economic law.
A spokesperson for the city, Me Delobbe, says that the city had calculated its tax based on information sent from the Walloon Region, which proposed a maximum tax of €18,750.
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However, this information only offered only an indicative value and was abstract in its scope, the lawyers for the plaintiffs argued. They also remained that, in the Walloon House of Representatives, the Commission on the Fight Against Trafficking of Human Beings advocated for the abolition of such taxes.
In its final decision, the Council of State said that the regional circular which the city had used to calculate the tax on prostitution venues did not exempt them from the contested tax change, finding it to be disproportionate.
“The tripling of the tax results in the amount of the annual charges being approximately equivalent to that of the turnover declared in their accounts,” the judgement reads. The tripling of the tax is “based on insufficiently established reasons in fact and in law”, and is therefore annulled.
