THE HAGUE, Netherlands -- A Dutch data protection watchdog issued a damning report Friday about the country's tax office, saying it breached privacy law for years by keeping a list of potential fraudsters.
It was another blow for the scandal-plagued Dutch tax office, which already is embroiled in the fallout from a discredited effort to root out child welfare fraud that regulators said discriminated against citizens with double nationality.
The Netherlands' previous government resigned in January to take responsibility for the child welfare scandal, but it continues to roil politics amid drawn out attempts to form a new ruling coalition following a general election in March.
“Of course, the tax office has to tackle fraud. But our research shows that the tax office registered fraud signals and used then in a way that is absolutely not allowed. Innocent people have been victims of this,” said Aleid Wolfsen, chairman of the Dutch Data Protection Agency.
The Dutch tax office stored personal details of taxpayers as part of its efforts to root out fraud, which is not allowed under privacy law in the Netherlands, the data protection agency said.
“Many of the core principles of the ... privacy law were seriously violated by tax authorities,” the agency said in a statement.
It is not the first time tax authorities have been reprimanded by the data protection watchdog. Last year, the agency said the tax office unlawfully discriminated against citizens by targeting them for investigation based on having double nationality in a discredited system designed to track down child benefit fraud.
Friday's report said tax officials had no legal foundation for the fraud alert system and kept people on the list for too long.
“More than a quarter of a million people have been on this fraud list — often unjustly — for far too long without their knowledge," Wolfsen said. “As a result, they could not defend themselves and they could not be removed from the list. This created a gap in legal protection.”
State Secretary for Finance Hans Vijlbrief called the report “hard and justified” and said the government already is working to reform the tax office. The fraud alert system was closed down 18 months ago, he said.
“The question now is whether citizens suffered unjustified consequences as a result of their registration in this system. We are investigating that,” Vijlbrief said.