Taxation of Robots

The brief proposes taxation of robots based on income and consumption, as well as on their characteristics of capital or labor. Such taxation could help meet the cost of supporting workers replaced by robots and could enhance the equity of the overall tax structure. The brief notes that increased use of robots could lead to a shrinking of traditional payroll and income tax bases, and discusses the advantages and disadvantages of taxing robots. It also explores possible tax instruments and relevant developments in Asia and beyond.