When Tax Officials are Unethical – Tax Fraud
The cabinet resignations forced as the result of an “unprecedented injustice” according to some Dutch lawmakers.
And while we are going to be talking about The Netherlands in this post, the elements of this scandal are easily applicable to any government abuse of power. The resignations of virtually the entire government can be linked to a report on the part of Dutch tax officials in December 2020.
As if the worldwide pandemic was not enough, in December 2020 the tax department accused lower-income families of tax fraud for the period between 2013 and 2019. They ordered already financially strapped families to repay all of the funds they had used to provide for their children. Naturally, when they stared at the staggering amount they owed, the families realized they would soon be facing complete financial ruin.
Amazing Ethics – Yes or No?
When officials in the current administration were bombarded by complaints from the families and their legal representatives, an investigation discovered that the former minister in charge of social affairs was responsible for producing a flawed report. That minister, who became the opposition leader of the new coalition government has since resigned.
It is all well and good that the opposition leader left in shame, however, the families who were wrongly accused of tax fraud have filed lawsuits against five additional politicians including the new finance minister. They all seemingly looked the other way.
This led the current government and their prime minister to accept responsibility. They will all leave their elected offices.
Said the prime minister “With today’s decision, the cabinet wants to do justice to all those parents who have been wronged unprecedentedly.” The government is to have new elections in March.
Given the pandemic and vaccine distribution issues the resigning ministers will most probably stay in place until after the new elections.
Frankly, I could not imagine officials of our government behaving in such an ethical manner. Apparently, in The Netherlands, accusing low-income parents of scamming the government is a national shame and brings great embarrassment. To be sure, the size of government there is much smaller, the population is smaller and more interwoven.
However, there are some details that should not be overlooked.
The scandal occurred because officials in the prior administration filed a report that jumped to the conclusion of tax fraud amongst hundreds of lower income families. The proceeding of collection issues was based on a lack of due diligence however, the problems run far deeper.
Of the approximately 14 million people who live in the Netherlands, 2.5 million live below the poverty line or about 13 percent. In addition, racism is alive and well in that country. The country is overwhelmingly white and there is, in certain quarters, a strong white supremacy movement. Not surprisingly, the Black Lives Matter movement has also caught on in the Netherlands.
As in many parts of the Western world, racial issues in the Netherlands are quite divisive. In filing the report to the previous government making sweeping accusations of tax fraud amongst the poor, there is more than the passing suggestion that some inherent bigotry may have caused government officials to look the other way.
We often accept, as is, assumptions based on our own biases. They may be good biases as well as bad, but in this case, it may have been a matter amongst some of “Of course they are fraudsters, why would I doubt the report?”
Within that context of false assumptions, the decisions made were highly unethical and has undoubtedly led to embarrassed soul searching.
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