People with low incomes under extra scrutiny at Tax Service
The Dutch Tax Authority’s inspected people with a low income more for fraud with childcare allowance than those with a high income, Trouw and RTL Nieuws reported. An algorithm used between April 2013 and July 2020 assigned high risk scores to low-income recipients and spared people with high incomes the inspection.
The machine learning algorithm independently determined which signals could indicate that a childcare allowance application had an increased chance of errors or fraud. The algorithm decided that people with low incomes were a bigger risk.
The Tax Authority acknowledged to Trouw and RTL that “at least since March 2016” the income of people “with variable threshold values” was used as a fraud risk indicator – low incomes received a higher risk score and high incomes a lower risk score.
Caretaker State Secretary Alexandra van Huffelen (Benefits) said she would send “a careful and substantive response” to parliament at the end of next week.
The news agencies previously also revealed that the Tax Authority used dual-nationality as a risk indicator for fraud.