Taxman hooks sex workers

- [News.com.au] - The Australian Taxation Office is investigating the sex industry in Darwin, sources have revealed.

Several escorts told the Northern Territory News last night that some escort agencies may have to close because of the inquiry.

It is believed some agencies owe more than $1million in tax.

The debt was accrued over several years because owners failed to pay GST.

Some agencies also owe thousands of dollars to escorts in missed superannuation payments.

Many of the escorts owed money were not aware they were entitled to super payments until completing a small business course organised by the agencies.

One escort worker, who did not want to be identified, said the sex industry in the Top End could collapse if agencies could not negotiate a deal with the tax office.

"Some agencies have not been paying the proper amount of GST since it was introduced," she said. ``Most of the escorts are owed super.

``We only learned about that this year when we did a small business course and were told that a sub-contractor, which we are, has to be paid super when we derive more than 80 per cent of our income from one employer.

``That applies to most of the escorts in the Territory but, as far as I know, none have received any super payments as yet.

``If the ATO wants to force the issue then the agencies will have no option but to close.

``Excuse the pun, but if that happens the industry up here will be left on its knees.''

Territorians are the biggest users of escorts Australia-wide.

Blondies Escorts manager Kate Fraser said escort agencies around Australia were being investigated by the ATO.

``I know I pay my tax,'' she said.

``We collect GST on the full booking fee unless the girls have their own ABN number and invoice us for their GST component.

"As for superannuation, most of our girls are working for us short-term so don't provide more than 80 per cent of their yearly income.''

Sex Worker Outreach Project officer Sam Bowden said SWOP supported the right of sex workers to be paid superannuation and encouraged escorts to pay the appropriate GST amounts.