DATA IS FOR the economy what oil used to be. It also becomes more and more important for the fiscal control. New IT applications are supposed to help optimise that control. The amount of data collected on taxpayers is huge, and an increasing number of additional information flows are in the process of being created. One example of this is the land registry. In 2011, the first steps towards the abolition of bank secrecy were taken. In 2015, the Central Information Point became operational at the National Bank of Belgium. This is a database with bank accounts and asset management contracts. A similar database exists for insurance policies. And by the end of next month, companies will have to disclose their controlling shareholders in the UBO register.

Last year, Europe imposed the obligation to report aggressive tax structures on tax consultants and financial intermediaries. For some time now, these advisers have been obliged to report possible money laundering to the Financial Information Processing Unit.  On an international level, fiscal administrations are exchanging ever more information.

BASIC INFORMATION IS supplemented with information from other databases. These are controlled networks resulting in crossroads databases, where even more comparisons and additions are made, allowing inconsistencies to come to light. As a result, the computer sends the tax investigator on his way with a wealth of foreknowledge. But as, after all, the tax investigator is only human, this foreknowledge may lead to bias instead of a fresh outlook on what is right and what is wrong.

DATABASES ARE a good thing. But like a garden, they need timely weeding. The data included in such a crossroads database can be interpreted in various ways. The fact that someone has a bank account can objectively be established. Drawing a conclusion as to whether an act should be a reason for reporting possible money laundering or aggressive tax planning is significantly less objective. And deducting from the entire context that a taxpayer may have made a mistake or may even be a fraudster is even less objective.

THE DEFICIT OF that data technology is a lack of control on the data that is uploaded in all those information systems. There is also a lack of insight into the way in which the data is combined to enable conclusions to be drawn. The tax administrations do not appear very eager to release a lot of information on those information flows and their processing. Both in the preventive and in the curative stage, the taxpayer has no or insufficient insight into the way in which the inspectors reach their preliminary conclusions. Taxpayers are unable to have the information stored in those gigantic databases rectified. Everyone who has ever taken a statistics class in his life may remember the joke that statistics can be used to prove almost everything. That mistakes will be made with this big data technology is beyond any doubt.

THE TAXPAYER does not have any defence against unfounded insinuations of the system. So the question is: what to do if Big Brother is mistaken? And how can the error margin be limited? The advocates of audits carried out on the basis of big data defend themselves with the argument that the tax administration does not need to justify why a tax audit is initiated. The reply to that argument is that when a tax audit is initiated on the basis of data or preliminary conclusions, the taxpayer has the right under applicable law to know what those conclusions are and what they are based on. There is bound to be a lot of bickering about that essential right in the coming period.