Toespraak Hans Vijlbrief: Forum on Tax Administration
Staatssecretaris van Financiën Hans Vijlbrief gaf op 7 december 2020 een digitale toespraak via Zoom.
Thank you for giving me the opportunity to talk to you today.
I wish to start by thanking Commissioner Bob Hamilton for his introductory remarks.
I would also like to congratulate Bob on his appointment last August to chair the FTA.
I am sure you pictured the start of your tenure as chair a little differently than this.
We are all talking to or staring at screens.
It is why I shall keep my remarks brief.
In 1936, whilst campaigning, the American president Franklin D. Roosevelt talked to a crowd in Worcester, Massachusetts. Amongst other things, he talked to them about the importance and fairness of a just tax system.
He said this, and I quote:
“One sure way to determine the social conscience of a Government is to examine the way taxes are collected and how they are spent. And one sure way to determine the social conscience of an individual is to get his tax-reaction. Taxes, after all, are the dues that we pay for the privileges of membership in an organized society.”
I wanted to begin my talk with this quote today because I believe it sums up the purpose of our work.
Of course, our world has changed enormously since FDR gave that speech.
Nevertheless, I think the quote stands as strong and rings as true now as it did when FDR delivered it.
Well, as FDR stated, tax revenues fund the costs of running a country.
They pay for government activities and reallocate wealth – or so they should.
But taxes also allow governments to keep the coffers filled for rainy days.
And this year has been one very long, rainy day …
The COVID-19 pandemic underlined the importance of strong institutions for our nations.
One of those essential institutions is a trusted tax administration.
Thanks to our taxation here in the Netherlands, we were able to help businesses and citizens when the grip of the pandemic started to choke the economy.
Of course, we cannot save everybody.
I am convinced however; that without financial support by the government – more precisely the department of Finance to which the tax administration belongs – the situation we are now in would be much worse.
In short: thank heavens for taxes!
As we near the end of 2020 and look with some trepidation towards next year, we must contemplate the future of our tax administrations.
What are some of the challenges we face?
One, of course, is how we deal with pandemics.
The corona virus has burdened our tax administrations to no end.
Business owners and citizens have inundated the department with phone calls and e-mails about emergency funding and unemployment benefits.
In addition, we have had to design, set-up and allocate these emergency funds.
All the while attending to the going concern.
For many working within the tax administration, it has been like trying to change a tire on a driving car.
To make life easier for those working within the tax administration, and of course for all our clients, we must make some changes.
I believe the way forward is to implement further digital technologies.
In the near future, someone’s tax administration should be almost unnoticeable.
It should be easy, it should be accessible, and it should be easily accessible.
People should be able to manage it the way they now manage their banking affairs …
… with an app on their smartphones.
As an underlying principle, I believe we should base our tax collection on trust as opposed to distrust and on compliance management instead of enforcement.
In the Netherlands, we approach businesses and citizens as clients.
We always strive to deliver the best service.
These core values automatically lead us to trying to find ways of improving the quality of our data.
In turn, this leads to wanting to improve the user experience.
This is why we talk to business owners.
How do they manage their tax administration?
For example, most businesses focus on quarters, whereas we, the taxmen and -women, focussed on the whole year.
This discrepancy lead to unnecessary paperwork and frustration.
We always had to correct payments because our data was not up to date or because the business-owners’ situation had changed.
Not an ideal situation.
We are now working on a system that will operate real time.
A system that is compatible with those used by businesses.
A system not designed for us, but for our clients.
It makes all the difference.
It will make tax administration as easy as using your phone to pay for a loaf of bread.
We are expecting it will also vastly improve the quality of the data we collect.
This will allow us to improve our service, which will help solidify the trust people have in our tax system.
Fewer errors equals more trust.
A big win for compliance management.
There are, unfortunately, still many challenges ahead before we reach our destination of a fully automated and highly appreciated tax administration.
I shall name five:
- First, the stability of tax revenues is at stake. Risks for new emerging tax gaps as well as difficulties with closing the large existing tax gaps
- Second, the current service and enforcement have reached their limits
- Third, unnecessary administrative burdens still hinder economic growth
- Fourth, siloed government processes do not meet societal expectations
- And last, privacy and transparency concerns are increasingly challenging public trust.
Add to this the challenge of keeping everything we digitise accessible to those who are limited in their understanding of digital technologies, and you understand the road ahead is long and winding.
I would rather not walk that road alone.
It is why I very much look forward to your ideas and input.
I have asked my people to be generous with their knowledge and expertise.
As I am hoping, you all will be.
Let us put good ideas to great use so we can further develop our civilised societies.
Thank you very much.
I wish you all a very inspiring and enjoyable conference!