Morality in Taxation?
Peter Kavelaars, Professor of Fiscal Economics at Erasmus School of Economics
Erasmus School of Economics

Our country is known as a gateway country for multinationals. Because of Brexit, lots of companies are therefore coming to the Netherlands.

Biopharmaceutic Bristol Meyers Squibb is one of these companies. It will set up a research institute for combating cancer in Leiden. However, only one month ago, this biopharmaceutical was accused by the US Senate for widespread tax evasion. Peter Kavelaars, Professor of Economics of Taxation at Erasmus School of Economics, is asked for his expertise on this moral dilemma in (25 April 2022).

Business climate

The Professor reasons, that the favourable fiscal climate is culturally determined. The Germans for instance, are stricter when it comes to taxes. Tax evasion does not occur so often in Germany therefore. In the Netherlands however, there is a tendency to attract companies with our tax system. However, a favourable tax system is often only a small aspect of the consideration of settling in a certain country, Kavelaars argues. Political stability and infrastructure are often much more decisive. Therefore, there is little reason not to formulate the tax laws stricter.


Kavelaars would not be in favour of taxing some companies more because of societal reasons. This may quickly lead to situations where businesses compensate their moral deficiencies. Morality is contingent on philosophy of life, and tax law knows no morality. Therefore these kinds of trade-offs are impossible to make in tax law. They can be settled outside of the tax law. For instance, via climate laws.

Tax evasion

When it comes to tax evasion, the professor is very clear: ‘That is simply illegal, even if it is for cancer research. The government has a duty to tackle that.’

However, he also reasons that it is not up to the government to make moral considerations on businesses avoiding taxes. He makes an analogy between individuals and big companies: ‘We get angry at large companies that avoid taxes, but private individuals regularly have jobs done in and around the house off the books. That is also a form of tax avoidance. Why don't we get just as angry about that?’

More information

For the whole item by, 25 April 2022, click here.

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