Please note: The algorithm descriptions in English have been automatically translated. Errors may have been introduced in this process. For the original descriptions, go to the Dutch version of the Algorithm Register.
Fiscal policy estimation models
- Publication category
- Other algorithms
- Impact assessment
- DPIA
- Status
- In use
General information
Theme
Begin date
Contact information
Responsible use
Goal and impact
One of the ministry's tasks involves quantitative studies of tax policy. This is done using (mathematical) models related to the (future) tax system.
Considerations
The models are necessary to assess future fiscal policy. The results of the models are relevant for policy-making, and are used in policy considerations regarding new tax legislation. New tax legislation is submitted to the House of Representatives.
Human intervention
Models are developed on the basis of relevant fiscal legislation. With regard to new policies, estimates usually involve assumptions. Human intervention is involved in making these assumptions. These estimates and assumptions are reviewed by the CPB. In addition, the assumptions are justified in an estimation explanation sent to the House of Representatives with the bill. The models are never used to make decisions about individual people.
The models developed do not use automated decision-making. The results of the models are presented to policymakers and politicians.
Risk management
Estimates are accompanied by a forecast memo. These are reviewed by colleagues and the CPB. An estimation memo is then produced. This contains an abridged description of the model and is made public.
Legal basis
The analyses are prepared as part of the ministry's task: advising on tax policy to be pursued and preparing tax legislation.
Links to legal bases
- Comptroller Act 2016: https://wetten.overheid.nl/BWBR0039429/2023-09-26
- Constitution articles 42, 43, 68, 69: https://wetten.overheid.nl/BWBR0001840/2023-02-22
Link to Processing Index
Elaboration on impact assessments
Where personal data are involved, pre-scan DPIAs or DPIAs are carried out. For current processing operations, these are in place.
Impact assessment
Operations
Data
The data is generally individual data of taxpayers. This applies, for example, to income and wage tax, but also to corporation tax and inheritance and gift tax. In the case of car taxes, it is data containing the technical specifications of cars.
In some cases, aggregated data from e.g. CBS are also used for analyses. Turnover tax, for example, uses CBS turnover data from sectors, while energy tax uses CBS energy consumption data by size of energy consumption.
Technical design
Using available data, a model is used to analyse how much a measure costs or yields and which groups will be affected by a change in the tax law. For some taxes, this is done on an individual basis. A model then contains a calculation of the tax to be paid based on the legislation in force at the time. These models are therefore basically a description of the tax legislation. In addition, the model calculates the tax payable based on the policy proposal. The models describe the difference between the current situation and the future situation. They incorporate the proposed changes into the model and analyse what the revenue is. They also look at which groups of people or businesses will pay more or less tax as a result.
In some cases, they also use a model that focuses only on the base relevant to the measure. Then it looks at which rate applies to arrive at a budgetary effect. This applies anyway to models that do not calculate on an individual basis.
Assumptions are also made about behavioural effects. This is always done for the total group as a whole. Based on these analyses, numbers, average amounts and the total gain or loss of the legislative change are calculated.
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