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On the other hand one of the main triggers for this whole operation was the mass fraud by people from Bulgaria who netted a lot of benefits by gaming the system

On the other hand one of the main triggers for this whole operation was the mass fraud by people from Bulgaria who netted a lot of benefits by gaming the system. They traveled to the Netherlands, applied for benefits and then went back to Bulgaria and used Dutch bank accounts and debit cards to get the cash. The tax office never wanted that to happen again and started this program to find fraudsters but ended up classifying a lot of people wrongly. To make it it even more Kafkaesque some of the Bulgarian fraudsters ALSO received the 30k compensation! One of the recommendations is to stop pumping around so much money. If you let less money circulate the system trough taxes and benefits less can go wrong. Why do people need to receive hundreds of thousands of Euros for children daycare? It makes no sense whatsoever. Let the people keep the money, pay less taxes and pay the daycare centers from the government directly for each child. The bureaucracy is the real problem here. When parents requested their paperwork they received hundreds of papers with all the real information blacked out. Imagine completely black papers. It was absolutely disgusting and the Dutch government even stepped down because of the whole affair. Amazingly the same political parties got elected again and are now in office in the same coalition as before...

jacquesm 5y ago
This has been trotted out many times before in defense of the tax office's behavior but it doesn't hold water: far more people were affected than Bulgarian fraudsters and besides that compared to the fraud committed by the well-off portion of NL the fraud committed by the poorer part is negligible. But guess who is better at defending themselves against unfair behavior by the authorities.
- rocqua 5y ago
  This is not a defense of the tax office, but it is the cause. The 'bulgaren-fraude' was the cause for the government to change policy (and I believe law) to be much stricter on fraud and be much more vigilant when trying to detect fraud. The current scandal is one of the end results here. An interesting intermediary result is that the culture at the tax-office changed to be much more about 'getting the fraudsters' and much less about 'helping people'. Throw on a bit of "bureaucrats trying to cover their own and their bosses' ass" when people accidentally get marked for fraud, and you start getting the results we have here. I fear that this culture (both the citizen as adversary 'getting fraudsters' culture and the ass covering) is still in place, and much more widespread throughout the government. Similar things seem to be happening at the National Mining Institute trying to discredit earthquake damage in Groningen for one example. <sarcasm> luckily when the government stepped down because of the last scandal, the new government was a big change and a big step towards fixing these attitudes </sarcasm>
  - yunohn 5y ago
    > The 'bulgaren-fraude' was the cause for the government to change policy (and I believe law) to be much stricter on fraud and be much more vigilant when trying to detect fraud. Whatever the stated reason was, they failed horribly at execution - by unfairly stereotyping and discriminating against innocent people. There lots of other ways to combat tax fraud.
    - rocqua 5y ago
      Fully agreed. But the stated reason is still relevant, if only to check what the history and reasoning of the original plan was. Here it informs us how the tax office came to see citizens as adversaries, when that was not (or less so) their stance before 2016.
      - jacquesm 5y ago
        https://www.vpro.nl/argos/lees/onderwerpen/artikelen/2021/bulgarenfraude.html https://www.vpro.nl/argos/lees/onderwerpen/artikelen/2021/bu...
  - berkes 5y ago
    > The 'bulgaren-fraude' was the cause No. It wasn't a cause, it was an excuse. Even back then, politicians warned that by cranking down on the relative few "frauding Bulgarians" a lot of collatoral damage was imminent. A politician even refused to implement it because of this and resigned. It was predicted to have this collatoral damage. I was publicly known that such fraud would be hard to fight at all, even if collatoral damage was accepted. And still, government wanted to appear tough so proceeded anyway. It was a choice. Not a force of hand.
  - fransje26 5y ago
    The tax office has a long history of (privacy) abuse, law breaking, and going after after the "little" people with no way to defend themselves. Some of the not-so-savory/unlawful recent abuses I recall: - Going after "all" the rent allowance fraudsters that were, according to them, undermining and abusing the system.. Result: recovery effort dropped after it turned out the cost of running the fraud task force was an order of magnitude higher than what was recovered from the people defrauding the system.. - Illegally storing and going through millions of traffic camera images to go after fraudsters driving a few kilometres more than they declared. Result: stopped by the supreme court, on ground of unlawful privacy abuse. - Cross governmental agencies checks & cross database checks of different expenditures (heating, rent, telephone bills, online shopping etc) to make sure that some low-income families were not earning more than declared. Also declared unlawful. The theme is recurrent: an abuse of power, and a propensity to break the law to extort money from lower class incomes mostly, as they are the least capable of pushing back. The motives are unclear, but, fundamentally, the problem originates in a political will and ingrained mentality of distrust of their fellow citizens -especially the poor- and blaming them for not contributing to the taxation effort. Very ironic coming from a fiscal paradise. Even more ironic when you know that, until recently, Shell could write-off world-wide expenses as local loses, and thereby not pay taxes in the Netherlands. Well, Shell left for London, so at least that problem is solved.
deleted 5y ago
[deleted]
secondcoming 5y ago
Genuine question... is 'people from Bulgaria' a euphemism for Roma gyspies?
- Kaotique 5y ago
  No.
mschuster91 5y ago
> Why do people need to receive hundreds of thousands of Euros for children daycare? It's not about "daycare", it is about assisting families in the (massive) expenses that raising a child incurs. Why? Because unlike the American pension system which is mostly backed by the stock market, European pension systems depend on young and healthy workers to pay the pensions of the current pensioner generation. Obviously this has the advantage that stock market crashes won't wipe out a whole generation's pensions and that the stock markets are not inflated artificially by enormous amounts of "dumb money" being loaded into anything that promises a profit (which is partially what caused the 2008ff crisis), but it has the disadvantage that society has to really take care of not falling into demographic traps.
- djbebs 5y ago
  Its about gathering power to the institutions and bureaucrats that work in them. Anything else is just an excuse to get higher budgets and grift.
- Kaotique 5y ago
  I think you misunderstood me. I am not saying they don't deserve support. I am saying that the government can support people in a way that is not so bureaucratic. Pay the institutions like schools, daycare, etc directly and don't burden the parents with requesting benefits and sending around enormous amounts of money. The institutions can apply for government money for each child they have to take care of. And the parents can just go to work and not move around swats of money. On of the examples in a mother with 3 children who had to pay back a hundred thousand Euro that were classified as wrongly received benefits. That means she received tens of thousands of Euros per year! What an insane burden to put on mother. If something goes wrong the consequences are gigantic. Just like it happened in this scandal.
  - em500 5y ago
    There are a few more reasons that I don't have time to delve into right now. But the main practical reason is that government assistance for daycare is very income dependent, so government paying directly to the daycare would require giving them parental income information, which is a big privacy no-no.
styluss 5y ago
> mass fraud by people from Bulgaria turned out that in the period 2007-2013, 805 Bulgarians From https://nl.wikipedia.org/wiki/Bulgarenfraude https://nl.wikipedia.org/wiki/Bulgarenfraude
- Kaotique 5y ago
  Thank you for pointing that out. I guess I should not have used the mass adjective.
  - jacquesm 5y ago
    The Bulgarians were very visible, but not the main reason: https://www.vpro.nl/argos/lees/onderwerpen/artikelen/2021/bulgarenfraude.html https://www.vpro.nl/argos/lees/onderwerpen/artikelen/2021/bu...
raxxorraxor 5y ago
You will never get bureaucracy out of Europe anymore, it is a done deal. Worse, surveillance will be extremely expanded with the AI act and police forces will be consolidated. Of course that won't help against criminal cases like this at all. It is truly the old continent by now. Taxes must be so high because the system will leech all that money, such schemes will be just a side note.
- hypertele-Xii 5y ago
  Good. Bureaucracy is what protects us from hypercapitalists raping our planet's environment for personal gain. European standards are stricter and produce cleaner everything from food to appliances to cars. Our lives are generally better in every way and for less money sunk, even accounting for supposedly higher taxes.
  - raxxorraxor 5y ago
    That is an illusion about the current situation, European politicians have the closest relations to industry and are far easier lobbied than decentral governments and bureaucracy can act as a defense of established actors. Privacy laws are build with contacts from Google and Facebook. Once the relation is established you will never get rid of this anymore. Exchange some popular issue for access to user data, the same that happened with telephone providers. Just be realistic about it.
gedy 5y ago
> Let the people keep the money, pay less taxes and pay the daycare centers from the government directly for each child. But what would all the important middle men do for a living then? /s
Cthulhu_ 5y ago
I'm sure this happened, but this is where the checks and balances come in; there were apparently no checks to see if the people actually lived and worked in NL. And there was no recourse to get the money back, which is a failing of European law and the fraudster's country of origin's legal branches. And the fix was to cast too wide a net; instead of handling the individual cases, they instead tried to apply logic and rules to it; if (country == bulgaria) fraudPotential += 100 kinda thing.
falcolas 5y ago
Ironically, this is one of the reasons I like the idea of UBI - you can't defraud the government when they're giving money to everyone. Most of the budget required to detect and enforce fraud vanishes. Secondary effects (and their costs), such as the one presented in this story, go away. It's not that simple, I know. But spending so much on bureaucratic red tape and fraud prevention is something that feels really silly with our current systems.
- cjrp 5y ago
  Why would the required budget vanish? People are greedy. Why claim UBI for just you when you could claim for your fictitious family of 6?
  - falcolas 5y ago
    At least here in the US, even children have tax IDs. I don't think it would vanish completely, but it makes it a much smaller issue when all you have look for double-submitted tax IDs instead of running heuristics.
    - tluyben2 5y ago
      I think the unique ID system should be fixed (without damaging privacy); we have the technology to fix IDs to identify people and let them ID themselves or do KYC without the current fraude prone and error prone setup. I understand this is a big undertaking, at the start, but in the end, it will be easier for most people, harder or impossible for fraudsters and easier for the government. Indeed having a unique UUID assigned at birth or when moving into the country is a first step and trivial to check for even if it is, in essence, anonymous.
      - Cederfjard 5y ago
        Systems similar to this exist. They’re not (all?) anonymous, however. Every Swedish citizen and resident has a unique and dedicated number (date of birth followed by four digits), and you can use it in tandem with for example BankID (https://en.wikipedia.org/wiki/BankID https://en.wikipedia.org/wiki/BankID) to authenticate yourself almost everywhere. It would be extraordinarily hard to make up UBI claims for non-existing family members and receive payouts in Sweden. You would first have to convince the tax agency to register the fake person in order to get a new personal number, either as a newborn or immigrant, which either way is obviously subject to controls. You’d then have to keep this up through various mandatory interactions with government agencies without getting found out. It would probably be much more effort (not to mention stress) than just working for the same money.
Beldin 5y ago
> If you let less money circulate the system trough taxes and benefits less can go wrong. Bonus: less can go wrong administratively too. Case in point: ever since the Dutch tax office had to also give out these kinds of wellfare/assistance funds, things have been a wreck at the tax office. It's been over a decade and it's no longer even their most important thing to fix...
- berkes 5y ago
  Or maybe the Tax office isn't equipped to hand out money. I'm not joking here, but an office that has been focused on extracting money for literally centuries, with a strong emphasis on detecting fraudsters and sticking to laws and rules, doesn't have the culture to handle allowences for people in need. The latter is a very human function. With lots of interpretations. The former is a very strict and rigid function. which is why previously the latter was done by local authorities, often they even did it through proxies in the neighborhoods: something done by people, close to the people.
sfifs 5y ago
Perhaps the problem is setting the wrong incentives. The way to deter fraud is not necessarily to make the benefits administration overly strict but to directly dis-incetivize fraud through stiff penalties. For instace if benefits fraud had a penalty of say 10 to 20 years imprisonment if convicted, the number of people trying to commit fraud would very likely go dramatically down.
- short_sells_poo 5y ago
  Are you seriously suggesting a 20 year sentence for benefits fraud? Ignoring the fact that such a system would be ripe for abuse and retaliatory behavior, just accidentally convicting an innocent person would absolutely ruin their life. Getting wrongly convicted is already a huge tragedy. Now you'd be handing out life sentences basically. Let's be real, it's not the rich people who tend to engage in benefits fraud and I'd argue most people who do this are in desperate situations.
- justin_oaks 5y ago
  I would think "higher chance of getting caught" would be better in deterring any particular crime than "stiff penalties". My first google search "harsh penalty deter crime" had this as the top: >Increasing the severity of punishment does little to deter crime. Laws and policies designed to deter crime by focusing mainly on increasing the severity of punishment are ineffective partly because criminals know little about the sanctions for specific crimes. https://www.ojp.gov/pdffiles1/nij/247350.pdf https://www.ojp.gov/pdffiles1/nij/247350.pdf
- BlueTemplar 5y ago
  Law has to be proportional - you can't deal out similar punishment for benefit fraud and for murder !!
- Beltalowda 5y ago
  What is "fraud"? People have gotten in to trouble for accepting groceries from family members and not reporting it to the benefit office as additional (in-kind) income. Technically, it is fraud, too, so they're not wrong. There's a long list of examples of "fraud"; like many crimes it's a scale.

jacquesm 5y ago

This has been trotted out many times before in defense of the tax office's behavior but it doesn't hold water: far more people were affected than Bulgarian fraudsters and besides that compared to the fraud committed by the well-off portion of NL the fraud committed by the poorer part is negligible. But guess who is better at defending themselves against unfair behavior by the authorities.

rocqua 5y ago
This is not a defense of the tax office, but it is the cause. The 'bulgaren-fraude' was the cause for the government to change policy (and I believe law) to be much stricter on fraud and be much more vigilant when trying to detect fraud. The current scandal is one of the end results here. An interesting intermediary result is that the culture at the tax-office changed to be much more about 'getting the fraudsters' and much less about 'helping people'. Throw on a bit of "bureaucrats trying to cover their own and their bosses' ass" when people accidentally get marked for fraud, and you start getting the results we have here. I fear that this culture (both the citizen as adversary 'getting fraudsters' culture and the ass covering) is still in place, and much more widespread throughout the government. Similar things seem to be happening at the National Mining Institute trying to discredit earthquake damage in Groningen for one example. <sarcasm> luckily when the government stepped down because of the last scandal, the new government was a big change and a big step towards fixing these attitudes </sarcasm>
- yunohn 5y ago
  > The 'bulgaren-fraude' was the cause for the government to change policy (and I believe law) to be much stricter on fraud and be much more vigilant when trying to detect fraud. Whatever the stated reason was, they failed horribly at execution - by unfairly stereotyping and discriminating against innocent people. There lots of other ways to combat tax fraud.
  - rocqua 5y ago
    Fully agreed. But the stated reason is still relevant, if only to check what the history and reasoning of the original plan was. Here it informs us how the tax office came to see citizens as adversaries, when that was not (or less so) their stance before 2016.
    - jacquesm 5y ago
      https://www.vpro.nl/argos/lees/onderwerpen/artikelen/2021/bulgarenfraude.html https://www.vpro.nl/argos/lees/onderwerpen/artikelen/2021/bu...
- berkes 5y ago
  > The 'bulgaren-fraude' was the cause No. It wasn't a cause, it was an excuse. Even back then, politicians warned that by cranking down on the relative few "frauding Bulgarians" a lot of collatoral damage was imminent. A politician even refused to implement it because of this and resigned. It was predicted to have this collatoral damage. I was publicly known that such fraud would be hard to fight at all, even if collatoral damage was accepted. And still, government wanted to appear tough so proceeded anyway. It was a choice. Not a force of hand.
- fransje26 5y ago
  The tax office has a long history of (privacy) abuse, law breaking, and going after after the "little" people with no way to defend themselves. Some of the not-so-savory/unlawful recent abuses I recall: - Going after "all" the rent allowance fraudsters that were, according to them, undermining and abusing the system.. Result: recovery effort dropped after it turned out the cost of running the fraud task force was an order of magnitude higher than what was recovered from the people defrauding the system.. - Illegally storing and going through millions of traffic camera images to go after fraudsters driving a few kilometres more than they declared. Result: stopped by the supreme court, on ground of unlawful privacy abuse. - Cross governmental agencies checks & cross database checks of different expenditures (heating, rent, telephone bills, online shopping etc) to make sure that some low-income families were not earning more than declared. Also declared unlawful. The theme is recurrent: an abuse of power, and a propensity to break the law to extort money from lower class incomes mostly, as they are the least capable of pushing back. The motives are unclear, but, fundamentally, the problem originates in a political will and ingrained mentality of distrust of their fellow citizens -especially the poor- and blaming them for not contributing to the taxation effort. Very ironic coming from a fiscal paradise. Even more ironic when you know that, until recently, Shell could write-off world-wide expenses as local loses, and thereby not pay taxes in the Netherlands. Well, Shell left for London, so at least that problem is solved.

deleted 5y ago

[deleted]

secondcoming 5y ago

Genuine question... is 'people from Bulgaria' a euphemism for Roma gyspies?

Kaotique 5y ago
No.

mschuster91 5y ago

> Why do people need to receive hundreds of thousands of Euros for children daycare? It's not about "daycare", it is about assisting families in the (massive) expenses that raising a child incurs. Why? Because unlike the American pension system which is mostly backed by the stock market, European pension systems depend on young and healthy workers to pay the pensions of the current pensioner generation. Obviously this has the advantage that stock market crashes won't wipe out a whole generation's pensions and that the stock markets are not inflated artificially by enormous amounts of "dumb money" being loaded into anything that promises a profit (which is partially what caused the 2008ff crisis), but it has the disadvantage that society has to really take care of not falling into demographic traps.

djbebs 5y ago
Its about gathering power to the institutions and bureaucrats that work in them. Anything else is just an excuse to get higher budgets and grift.
Kaotique 5y ago
I think you misunderstood me. I am not saying they don't deserve support. I am saying that the government can support people in a way that is not so bureaucratic. Pay the institutions like schools, daycare, etc directly and don't burden the parents with requesting benefits and sending around enormous amounts of money. The institutions can apply for government money for each child they have to take care of. And the parents can just go to work and not move around swats of money. On of the examples in a mother with 3 children who had to pay back a hundred thousand Euro that were classified as wrongly received benefits. That means she received tens of thousands of Euros per year! What an insane burden to put on mother. If something goes wrong the consequences are gigantic. Just like it happened in this scandal.
- em500 5y ago
  There are a few more reasons that I don't have time to delve into right now. But the main practical reason is that government assistance for daycare is very income dependent, so government paying directly to the daycare would require giving them parental income information, which is a big privacy no-no.

styluss 5y ago

> mass fraud by people from Bulgaria turned out that in the period 2007-2013, 805 Bulgarians From https://nl.wikipedia.org/wiki/Bulgarenfraude https://nl.wikipedia.org/wiki/Bulgarenfraude

Kaotique 5y ago
Thank you for pointing that out. I guess I should not have used the mass adjective.
- jacquesm 5y ago
  The Bulgarians were very visible, but not the main reason: https://www.vpro.nl/argos/lees/onderwerpen/artikelen/2021/bulgarenfraude.html https://www.vpro.nl/argos/lees/onderwerpen/artikelen/2021/bu...

raxxorraxor 5y ago

You will never get bureaucracy out of Europe anymore, it is a done deal. Worse, surveillance will be extremely expanded with the AI act and police forces will be consolidated. Of course that won't help against criminal cases like this at all. It is truly the old continent by now. Taxes must be so high because the system will leech all that money, such schemes will be just a side note.

hypertele-Xii 5y ago
Good. Bureaucracy is what protects us from hypercapitalists raping our planet's environment for personal gain. European standards are stricter and produce cleaner everything from food to appliances to cars. Our lives are generally better in every way and for less money sunk, even accounting for supposedly higher taxes.
- raxxorraxor 5y ago
  That is an illusion about the current situation, European politicians have the closest relations to industry and are far easier lobbied than decentral governments and bureaucracy can act as a defense of established actors. Privacy laws are build with contacts from Google and Facebook. Once the relation is established you will never get rid of this anymore. Exchange some popular issue for access to user data, the same that happened with telephone providers. Just be realistic about it.

gedy 5y ago

> Let the people keep the money, pay less taxes and pay the daycare centers from the government directly for each child. But what would all the important middle men do for a living then? /s

Cthulhu_ 5y ago

I'm sure this happened, but this is where the checks and balances come in; there were apparently no checks to see if the people actually lived and worked in NL. And there was no recourse to get the money back, which is a failing of European law and the fraudster's country of origin's legal branches. And the fix was to cast too wide a net; instead of handling the individual cases, they instead tried to apply logic and rules to it; if (country == bulgaria) fraudPotential += 100 kinda thing.

falcolas 5y ago

Ironically, this is one of the reasons I like the idea of UBI - you can't defraud the government when they're giving money to everyone. Most of the budget required to detect and enforce fraud vanishes. Secondary effects (and their costs), such as the one presented in this story, go away. It's not that simple, I know. But spending so much on bureaucratic red tape and fraud prevention is something that feels really silly with our current systems.

cjrp 5y ago
Why would the required budget vanish? People are greedy. Why claim UBI for just you when you could claim for your fictitious family of 6?
- falcolas 5y ago
  At least here in the US, even children have tax IDs. I don't think it would vanish completely, but it makes it a much smaller issue when all you have look for double-submitted tax IDs instead of running heuristics.
  - tluyben2 5y ago
    I think the unique ID system should be fixed (without damaging privacy); we have the technology to fix IDs to identify people and let them ID themselves or do KYC without the current fraude prone and error prone setup. I understand this is a big undertaking, at the start, but in the end, it will be easier for most people, harder or impossible for fraudsters and easier for the government. Indeed having a unique UUID assigned at birth or when moving into the country is a first step and trivial to check for even if it is, in essence, anonymous.
    - Cederfjard 5y ago
      Systems similar to this exist. They’re not (all?) anonymous, however. Every Swedish citizen and resident has a unique and dedicated number (date of birth followed by four digits), and you can use it in tandem with for example BankID (https://en.wikipedia.org/wiki/BankID https://en.wikipedia.org/wiki/BankID) to authenticate yourself almost everywhere. It would be extraordinarily hard to make up UBI claims for non-existing family members and receive payouts in Sweden. You would first have to convince the tax agency to register the fake person in order to get a new personal number, either as a newborn or immigrant, which either way is obviously subject to controls. You’d then have to keep this up through various mandatory interactions with government agencies without getting found out. It would probably be much more effort (not to mention stress) than just working for the same money.

Beldin 5y ago

> If you let less money circulate the system trough taxes and benefits less can go wrong. Bonus: less can go wrong administratively too. Case in point: ever since the Dutch tax office had to also give out these kinds of wellfare/assistance funds, things have been a wreck at the tax office. It's been over a decade and it's no longer even their most important thing to fix...

berkes 5y ago
Or maybe the Tax office isn't equipped to hand out money. I'm not joking here, but an office that has been focused on extracting money for literally centuries, with a strong emphasis on detecting fraudsters and sticking to laws and rules, doesn't have the culture to handle allowences for people in need. The latter is a very human function. With lots of interpretations. The former is a very strict and rigid function. which is why previously the latter was done by local authorities, often they even did it through proxies in the neighborhoods: something done by people, close to the people.

sfifs 5y ago

Perhaps the problem is setting the wrong incentives. The way to deter fraud is not necessarily to make the benefits administration overly strict but to directly dis-incetivize fraud through stiff penalties. For instace if benefits fraud had a penalty of say 10 to 20 years imprisonment if convicted, the number of people trying to commit fraud would very likely go dramatically down.

short_sells_poo 5y ago
Are you seriously suggesting a 20 year sentence for benefits fraud? Ignoring the fact that such a system would be ripe for abuse and retaliatory behavior, just accidentally convicting an innocent person would absolutely ruin their life. Getting wrongly convicted is already a huge tragedy. Now you'd be handing out life sentences basically. Let's be real, it's not the rich people who tend to engage in benefits fraud and I'd argue most people who do this are in desperate situations.
justin_oaks 5y ago
I would think "higher chance of getting caught" would be better in deterring any particular crime than "stiff penalties". My first google search "harsh penalty deter crime" had this as the top: >Increasing the severity of punishment does little to deter crime. Laws and policies designed to deter crime by focusing mainly on increasing the severity of punishment are ineffective partly because criminals know little about the sanctions for specific crimes. https://www.ojp.gov/pdffiles1/nij/247350.pdf https://www.ojp.gov/pdffiles1/nij/247350.pdf
BlueTemplar 5y ago
Law has to be proportional - you can't deal out similar punishment for benefit fraud and for murder !!
Beltalowda 5y ago
What is "fraud"? People have gotten in to trouble for accepting groceries from family members and not reporting it to the benefit office as additional (in-kind) income. Technically, it is fraud, too, so they're not wrong. There's a long list of examples of "fraud"; like many crimes it's a scale.