Lessons to Be Learned from the Dutch Childcare Allowance Scandal: A Comparative Review of Algorithmic Governance by Tax Administrations in the Netherlands, France and Germany

Posted: 11 Nov 2022

See all articles by David Hadwick

David Hadwick

UAntwerpen | FWO Research Foundation for Flanders

Date Written: November 1, 2021

Abstract

In January 2021, the cabinet of Mark Rutte, Prime Minister of the Netherlands resigned after the revelation that the Dutch tax administration had infringed fundamental rights of an estimated 35,000 welfare recipients. The Dutch childcare allowance scandal or toeslagenaffaire unveiled the ways in which the Dutch tax administration made use of artificial intelligence algorithms to discriminate against and violate the rights of welfare recipients. The Netherlands is not the only EU Member State using artificial intelligence for the selection of taxpayers for audits. Accordingly, the toeslagenaffaire can offer valuable lessons for the protection of taxpayers’ rights in the context of algorithmic governance in other Member States. Following the introductory section 1 of this article, section 2 outlines the important elements of the toeslagenaffaire and identifies qualitative requirements for the protection of taxpayers’ rights. In section 3, a joint comparative study of French and German algorithmic governance is conducted to determine whether lessons were learned from the toeslagenaffaire.

Keywords: Artificial Intelligence, Discrimination, Tax Policy, Machine-learning, Machine Bias

JEL Classification: K34; K42

Suggested Citation

Hadwick, David, Lessons to Be Learned from the Dutch Childcare Allowance Scandal: A Comparative Review of Algorithmic Governance by Tax Administrations in the Netherlands, France and Germany (November 1, 2021). IBFD World Tax Journal, Volume 13, Issue 4, November 2021, Available at SSRN: https://ssrn.com/abstract=4264953

David Hadwick (Contact Author)

UAntwerpen | FWO Research Foundation for Flanders ( email )

Prinsstraat 13
Antwerp
Belgium

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