For about 20 years, the Dutch tax office used a home-brewed computer system (RAM) that brought the information about millions of taxpayers into one model. KPMG has looked at how the Belastingdienst used this system, and their findings are shocking.
The system allowed for the unlimited combining of different taxpayer information (income data, assets and debts, number of cars, real estate, partners, nationality, etc.). Many people at the Belastingdienst had access to the system without any oversight.
Stefan Vermeulen and Derk Stokmans write for NRC (machine translated):
The information that KPMG found gives the impression that tax inspectors followed their gut feeling when deciding to subject citizens to additional investigation. This happened not only by selecting Chinese or Turkish entrepreneurs because they would more often employ illegal workers. “Nationality data was [used as a selection tool] when signals were present that certain nationalities were committing fraud,” various tax service employees told KPMG.
Even when data about (second) nationality was not explicitly used as a selection tool, it was still provided to inspectors. For example, it was included in a third of the unsecured Excel files that KPMG found on the Tax Authority’s network drives.
Other fragments of information that KPMG found also give the impression that the tax inspector’s intuition and arbitrariness played a role. For instance, there were projects about the Beverwijk bazaar, fish stalls, trailer parks, prostitutes, ‘Belgian pensioners’, bankruptcies of Amsterdam taxi companies, and the allegedly poor tax morale of divorced entrepreneurs.
Unfortunately, KPMG says there is no way to find out how many people have fallen victim to the arbitrariness of RAM. There is insufficient record-keeping to make that a feasible exercise.