Use the momentum of Tax system reform to enhance efficiency
The government and House of Representative’s wishes to revise the tax system prompted the Court of Audit to send a letter to the House on 19 March 2015.
The letter refers to the friction between the current tax system and the Tax and Customs Administration’s ability to manage it. Earlier audits by the Court had found that the Administration sometimes failed to respond robustly to parliament’s wishes to introduce new tax schemes. The Court also draws attention to the principle that taxation is part of the democratic process. The wider discussion of the extension of the common tax base will also affect the trust of citizens in the tax system. The greater part of the municipalities’ income comes from central government. It is collected from citizens and companies by the central government, not by the municipalities themselves. Any revision of the tax system to make more efficient use of tax funds must take the relationship between tax collection and expenditure into account. The Netherlands Court of Audit suggests that parliament uses the momentum built up by the revision of the tax system to improve the efficiency of tax expenditure, too.