The Netherlands’ data protection watchdog imposed a record 3.7 million euro ($4 million) fine Tuesday on the country’s tax office for unlawfully processing and storing personal information in a “black list” used to detect fraud.
Data Protection Authority’s Chairman Aleid Wolfsen said the government’s Taxation Service “violated the rights of the 270,000 people on that list in an unprecedented way.”
For over 6 years, people were often wrongly labeled as fraudsters, with dire consequences,” said Wolfsen.
It was the latest in a string of rebukes for Dutch tax authorities, including a fine of 2.75 million euros last year for what the Data Protection Authority called discriminatory practices in a long-running scandal centered on efforts to stamp out fraud with child welfare payments.
The last Dutch government resigned early last year to take responsibility for the welfare fraud scandal.
In the latest case, the authority said that tax authorities collected personal information without a proper legal foundation, often got personal details wrong, leading to people being incorrectly labeled as fraudsters, and did not adequately protect the list.
An internal investigation also revealed that tax office staff were instructed to use the nationality and appearance of people as criteria for gauging whether they could be considered fraud risks.
“If you had a Turkish, Moroccan or East European nationality, then you were further investigated without good reason,” Wolfsen said. “This discrimination is unacceptable.”
The data protection agency said that the tax authorities stopped using the black list in February 2020.
The government minister in charge of the tax office, Marnix van Rij, said the decision was “hard and undeniable and shows once again that fundamental improvements are necessary at the Taxation Service.”
He called the fine “a painful, but understandable conclusion given the seriousness of the findings” and said he would not appeal.
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