South Korea Eyes Robot Tax

August 9, 2017 Taxation in South Korea

Robot taxSEOUL – The government of South Korea could be the first one in the world to implement a “robot tax”.

The government of South Korea is mulling extending a tax break available for businesses investing in automation technology, but reducing the rate of the deduction.

Currently, any business in South Korea which invests in industrial automation technology is eligible to receive a corporate tax deduction of 3 percent to 7 percent, with the exact rate varying based on the scope and size of the business in question.

The policy is currently scheduled to end this year.

However, the government is now mulling the potential implications of extending the program out until the end of 2019, but reducing the rate of the deduction by 2 percent
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Some experts have dubbed the potential move as a “robot tax”, as it will reduce the benefit provided to investing in “robots” in production facilities.

The issue of “robot taxes” is coming to the forefront of global tax discussion, as an increasing number of lawmakers and academic are saying that a rising reliance on automation will see a reduced reliance on human workers.

The diminish workload for humans could result in increased joblessness, and a fall in tax revenues, as a smaller number of taxpayers are being paid for their labour.