Korea takes first step towards levying robots

With new technologies like automation vastly restructuring the global labour landscape, one country thinks it’s found a way to stave off the robot revolution.

The Korean government recently announced a new “tax law revision plan”, which involves winding back tax benefits for automation equipment. 

Today, firms investing in industry automation equipment are awarded a corporate levy reduction of up to 7% of the investment. While this temporary policy was set to expire by the end of the year, the Korean government suggested an extension to 2019, but with lessened benefits.

The initial idea behind a robot levy was to promote the use of automation in industrial sectors such as manufacturing. But with new technologies moving into other sectors like human resources, the potential job losses make this a problematic shift for the government to incentivise.

While no country has yet adopted an official robot levy, many experts have argued the pros and cons of such a system.

Microsoft founder Bill Gates argues that a robot levy would ultimately be beneficial for the workforce, the revenue of which should fund retraining of those losing jobs to automation.

"For a human worker who does $50,000 worth of work in a factory, the income is taxed," Gates said. "If a robot comes in to do the same thing, you'd think that we'd tax the robot at a similar level."

"What the world wants is to take this opportunity to make all the goods and services we have today, and free up labor, let us do a better job of reaching out to the elderly, having smaller class sizes, helping kids with special needs, all of those are things where human empathy and understanding are still very unique," he said. "We still deal with an immense shortage of people to help out there."

Former U.S. Treasury Secretary Lawrence Summers argues the opposite, saying Gates’ argument is “profoundly misguided”.

"A sufficiently high tax on robots would prevent them from being produced," he said.

The International Federation of Robotics (IFR) has also been strongly against the idea of levying the use of robots, claiming it would “undermine proper competition and technological innovation in the robotics sector”.