Tax reform debate shows cracks in coalition

Wopke Hoekstra in Brussels
Wopke Hoekstra representing the Netherlands at a meeting of EU finance ministers in Brussels. Nov. 8, 2019Ale_MiDepositPhotosDeposit Photos

There are major doubts in parliament about D66 Finance Minister Wopke Hoekstra's plans to reorganize the Tax Authority, including from the coalition parties themselves, was revealed during a debate about the Tax Authority with Hoekstra and Prime Minister Mark Rutte on Tuesday, NOS reports.

Hoekstra plans to split the Tax Authorities into three parts - Customs, Allowances, and Taxes. Each part will have its own official leadership, and two State Secretaries will be appointed to be politically responsible for the service. Who the two State Secretaries will be, is not yet known.

CDA parliamentarian Pieter Omtzigt thinks Hoekstra is rushing the reorganization and that these plans must first be extensively discussed. "Two new State Secretaries are coming, who may have an interesting opinion about this reorganization," he said according to the broadcaster.

The other two coalition parties ChristenUnie and VVD wonder whether the reorganization is advisable. "I'll be honest," said VVD parliamentarian Helma Lodders. "It is not clear to me whether we have found the egg of Columbus with the proposed reorganization." ChristenUnie wants to scrap the allowance system completely.

Opposition party GroenLinks thinks it is a bad idea to split up the different tasks of the Tax Authority. "It concerns the income of millions of households, then allowances and taxes cannot be seen as two separate things?" MP Bart Snels said. 

The Finance Minister promised the Kamer that he is not making any hasty decisions. But some bottlenecks simply need to be resolved quickly, he said.

Hoekstra proposed the reorganization after the so-called childcare allowance debacle. Hundreds of parents were falsely accused of fraud, had their childcare allowances halted, and ended up in serious financial difficulties as a result. There are suspicions that investigators used ethnic profiling - at one daycare in Eindhoven, parents whose allowance was halted almost exclusively had a second nationality.

A large part of the parents of who it is certain that their allowances were unjustly halted, have received compensation. But the group of victims may be much larger. The Donner Committee is looking into the around 9 thousand cases of child care allowances being halted by the Tax Authority department for detecting fraud, to see how many of these parents were actually committing fraud and how many are entitled to compensation.

The parliamentarians also talked about the current arrangements and compensation for the affected parents. Rutte and Hoekstra, who met with around 200 such parents on Monday, promised that all the parents will receive compensation as soon as possible. But they have to wait for the results of the Donner Committee's investigation into this mess before they can proceed. These results are expected in early February.