South Korea introduces world's first 'robot tax'

South Korea introduces worlds first robot tax

South Korea is the first country to introduce a dedicated tax on robots in a bid to quell fears that the machines will replace human workers and lead to mass unemployment.

The Korean government will limit tax incentives for investments in automated machines as part of wider ligislative measures to revise the country's tax laws.

It is hoped that the move will help to lessen the impact that increased automation has on income tax as well as providing a 'welfare buffer' to cope with the expected rise in unemployment as a result of the economy's increasing dependence on robots.

In 2015, the International Telecommunication Union Index ranked South Korea as the most technologically advanced country in the world and the International Federation of Robotics recently estimated that there were more than 500 multipurpose industrial robots for every 10,000 employees in the manufacturing sector alone.

Adam Pennington, an employment solicitor at the law firm, Stephensons, said the ‘rise of the robots’ in the workforce could have huge ramifications:

“From the perspective of the employer, replacing people with robots in the workplace has a number of significant advantages. A robot will not bring a claim for unfair dismissal or discrimination, nor would a robot employee require accountants to work out specific tax deductions and monthly wages.

"A robot could, on the whole, allow a business to generate a much larger income and at the same time not have to worry about the regulations and protections that would prevent tribunal claims being brought against them. 

“The current model for how businesses operate will need to be completely rethought, with radical changes in employment law inevitable.

“I fear that in the not so distant future, lesser skilled employees will face the brunt of redundancies as their jobs are taken by robots, while employees with higher qualifications, skill sets and experience are arguably less likely to be made redundant.

“This could bring about a more competitive workplace environment than we currently have, as employees upskill so they have more of a chance of sustainable employment in the future.”