South Korea and Samsung, one of the country’s industrial giants, achieved a world-first in the development of militarized robots, and another when South Korea used this technology to protect its borders with North Korea. South Korea have this week achieved yet another world first in relation to robotic technology in courageously announcing their intention to tax automation involving robots.
Why are they doing this and why is their action courageous? Because other economies facing the identical scenario of technology-driven disruption leading to job losses, appear trapped in a protracted and inertia-causing cycle of analysis with little in the way of policy responses. This is out-of-synch with the current onslaught of developments and disruptions, particularly artificial intelligence, that require speedy and decisive responses from governments if their citizens are to feel that ‘the future’ for the labour market, and for society is one to welcome. It is often suggested that the US election of President Trump and the unexpected Brexit result that came shortly before this, were an indicator of the increasing fear and insecurity in relation to levels of long-term unemployment and fears that this is a precursor for things to come. Protracted periods of unemployment and under-employment are already the reality for many and becoming a spectre for a large section of the traditionally economically-secure middle-classes. Immigration has become the scapegoat for citizens made fearful by the prospect of a world in which their labour may be surplus to requirements.
The South Korean government’s decision to impose a tax, albeit a small one, is not an attempt to discourage technological progress but rather to acknowledge, at a governmental level, that this progress brings with it inevitable negative economic and societal impacts for many of their citizens. Substantial job losses, increasing income uncertainty and as a consequence less tax income in government coffers are the obvious ones. Taxing technology is an early signal to citizens that the government is looking ahead, understanding the risks as well as the benefits of technology and taking responsibility for enacting policies that will protect its citizens.
Cara McGoogan in her article South Korea introduces world’s first robot tax in The Telegraph writes:
It is hoped the (tax) policy will make up for lost income taxes as workers are gradually replaced by machines, as well as filling welfare coffers ahead of an expected rise in unemployment, according to the Korea Times.
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While Korea is the first to take action, the issue of disruptive technological change impacting on employment and tax revenue is one facing all large economies. In Europe and in the US the suggestion of taxation to begin to mitigate these impacts has been dismissed as too hard.
Greg Nichols in his article South Korea mulling world’s first robot tax writes for Robotics:
Opponents of taxing robots say such efforts will stifle technology development and ultimately put countries that impose the taxes at a global disadvantage. There are also logistical questions about how such a tax would be applied and what would qualify as a robot.
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