Wednesday 10 August 2022

Tax office fined €3.7m for breaking privacy law with fraud suspect blacklist

Photo: Joep Poulssen

The Dutch privacy watchdog AP has fined the finance ministry €3.7 million for operating a blacklist of potential tax fraudsters, which it said broke privacy legislation in six different ways.

The regulator earlier fined the tax office €2.75 million for breaching privacy in relation to the childcare benefit scandal. In particular, the way the tax office considered dual nationality to be a potential risk was illegal and discriminatory, the AP said at the time.

Although some parents caught up up in the childcare benefit case were on the blacklist, it covered more than just supplementary benefits and so included more people, hence the bigger fine, the AP said in Tuesday’s ruling.

By using the blacklist, the tax office violated the rights of the 270,000 people who were included for over six years, said AP chairman Aleid Wolfsen.

‘People were often wrongly labeled as fraudsters, with dire consequences… the tax office turned lives upside down,’ he said.

In particular, nationality and appearance were considered risk factors. ‘If you had Turkish, Moroccan or Eastern European nationality, then you would be subject to extra checks because of this,’ Wolfsen said. ‘Sending gifts to mosques and high healthcare bills if you had an Eastern European-sounding surname were also seen as a risk factor for fraud.’

Last month, PwC revealed that tax office instructions said that fraud risk assessments could be made on the basis of nationality.

Public

The tax office stopped using the blacklist, which was first developed in 2001, in March 2020, when its existence was first made public.

The fine will be paid by the finance ministry directly into the treasury, but it is the principle that counts, AP spokesman Caspar Itz told broadcaster NOS.

‘Through issuing fines, we can show what is and what is not allowed,’ he said. ‘The size of the fine also reflects the seriousness of the offence.’

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