The Dutch Tax Service Was Once Considered One of the World’s Best, Until Two Reorganizations Spiraled Out of Control

At a European conference in Lisbon in May 2000, Dutch officials were invited to explain how their tax authority worked so well. Around the turn of the century, the service was described in domestic and international media as “the jewel of the Dutch government,” “the showcase of automation” and even the best tax authority in the world.

Dutch experts traveled to countries including Russia and China to share their approach. They advised on professionalization, fraud prevention, integrity and customs. That image is now difficult to recognize. Thousands of families had benefits wrongly reclaimed from them, while the agency repeatedly misused personal data. A failed reorganization drove thousands of experienced employees out, and millions of files containing sensitive information were not shared with a parliamentary inquiry into the benefits scandal.

Newspaper descriptions shifted from a model agency to a “problem child,” an “organizational chaos” and a “cesspool of misery.” The difficulties have not ended. Finance State Secretary Eelco Eerenberg recently told parliament that the Jetten cabinet is introducing few tax measures in areas representing at least half of all government revenue. He attributed the limited room for improvement in recent years to efforts to clear backlogs and implement legislation.

The article traces the origins of the transformation to the early 1980s, when economic crisis, mass unemployment and rising poverty drove interest in New Public Management. The philosophy treated citizens as consumers and government as a business. The Tax Service adopted customer service desks, a telephone helpline and assistance with tax returns, along with the slogan, “We can’t make it more fun, but we can make it easier.”

The service had once organized employees in teams around individual taxes, such as income tax. Later reforms changed how the agency operated. Former senior officials describe a system in which, ultimately, “no one could make decisions at policy level anymore.”

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We can’t make it more fun, but we can make it easier.