Korea weighs 'robot tax' as AI-driven job losses loom

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Korea weighs 'robot tax' as AI-driven job losses loom

Published: 06 May. 2026, 05:00

SARAH CHEA
[email protected]

Audio report: written by reporters, read by AI

[GETTY IMAGES]

[NEWS ANALYSIS]

Advanced AI is wiping out a vast number of human jobs, fueling calls for a so-called “robot tax” as a hedge against mass technological unemployment.

Korea is weighing the introduction of such a levy as the threat of AI-led disruption grows more tangible, underscored by the debut of the Atlas humanoid at CES 2026.

OpenAI recently suggested the concept of taxing “automated labor,” while major tech figures, including Bill Gates and Elon Musk, have long advocated for a so-called robot tax, or more broadly, an “AI tax.”

The National Assembly Futures Institute recently released a report urging swift legislation for an “AI social security tax,” designed to channel profits generated by AI back into society. President Lee Jae Myung has also said that a robot tax could be considered.

However, questions remain over scope, amid concerns that poorly calibrated measures could dampen innovation and gradually erode sustained economic dynamism.

No country has yet officially adopted a robot tax, but similar policy directions are emerging through measures such as the European Union’s AI Act, which establishes a comprehensive regulatory framework for AI based on risk, transparency and accountability, and a proposed automation layoff tax bill in New York State, which would impose costs on firms that replace workers through large-scale automation.

Earned by AI, shared with everyone
At its core, the robot tax envisions companies that deploy robots paying into the public purse, with governments redistributing the proceeds, whether through direct cash transfers, public funds or targeted policy programs.

Proponents argue that while industrial robots generate vast profits, they remain largely outside traditional tax regimes, creating gaps in income tax revenues that would otherwise be collected if human workers filled those roles. As automation displaces workers at scale, they add, such a levy could finance retraining and support for those pushed out of the labor market.

The case carries particular weight in Korea, which has the world's highest robot density.

Korea deployed 1,012 industrial robots per 10,000 employees in 2023, far exceeding the global average of 162, according to data from the International Federation of Robotics. The gap is stark with Singapore, the runner-up, recording 770 units, followed by China at 470 and Germany at 430.

The Atlas humanoid robot, developed by Boston Dynamics, greets visitors during a main presentation by Hyundai Motor Group at CES 2026 in Las Vegas on Jan. 5. [SARAH CHEA]

“The cleanest approach will be creating a dedicated ‘AI tax’ or ‘robot tax,’ for firms whose profits have surged on the back of AI, and redistributing the proceeds as a form of basic income to those displaced,” said Jeon Chang-bae, chairman of the International Association for AI and Ethics.

“If deployed as public policy funding, priority should go to retraining and reemployment support,” he added.

Labor tensions are already surfacing as the union at Hyundai has insisted that the introduction of its Atlas robot on factory floors “cannot proceed without prior consultation,” and has written guarantees on employment and working conditions tied to AI adoption into this year’s wage negotiations.

Yet much of the company’s current factory work force entered in the 1970s and is nearing retirement, suggesting that a large-scale deployment of humanoids could coincide with their exit.

“Once the bulk of today’s militant union cohort retires, the gap could be filled with humanoids rather than new hires,” said Koh Tae-bong, an executive director at iM Securities, adding that the shift could deliver Hyundai “enormous gains.”

Atlas, a humanoid robot by Hyundai Motor-backed Boston Dynamics, demonstrates working at a factory at CES 2026 in Las Vegas on Jan. 8. [YONHAP]

Taxing the future before arrival
Critics warn that a premature robot tax could stifle technological progress and — given its tight link to national competitiveness — push companies to offshore operations in territories without such taxation.

Bind innovation with taxation, they argue, and firms will turn cautious on research and development, shifting their centers of gravity abroad.

“Companies already pay corporate taxes on their profits. To levy an additional tax simply because robots improve profitability risks double taxation,” said an industry source at a major manufacturing firm.

Experts, however, are less alarmed, contending that the domestic policy environment remains broadly business-friendly.

“In Korea, policies have tended to land on the side of business; Even when tax regimes tightened for decades, only segments of manufacturing with very low labor costs moved offshore,” said Lee Min-suk, a software convergence professor at Kookmin University. “The gains would still far outweigh a modest tax burden.”

OpenAI recently published a report titled “Industrial Policy in the Intelligence Age,” arguing that governments should consider higher taxes on AI-driven profits, including levies on “automated labor.”

It also calls for incentives to help companies retain workers and invest in retraining, and proposes piloting a four-day, 32-hour workweek without pay cuts so that productivity gains from AI translate into improved worker welfare.

Microsoft founder Bill Gates has urged a robot tax since 2017, and Tesla CEO Elon Musk has floated the idea of a "universal high income" in the form of direct government payouts to the public in response to AI-driven job losses.

From left, the Atlas humanoid robot, and members of Hyundai Motor labor union stage a protest for wage increase in Ulsan on Sept. 3, 2025. [REUTERS/YONHAP]

Blurred lines of definition
Even if a societal consensus builds in favor of taxing robots, fundamental questions remain unresolved: Which machines should be taxed, and at what rate?

Korea already relies heavily on industrial automation, with robotics deeply embedded in manufacturing. The automation rates in body assembly and painting processes at Hyundai’s Ulsan plant reached almost 100 percent.

Whether such industrial systems should be taxed at all, or whether the levy should apply only to more advanced humanoids, remains an open debate.

“Companies whose profitability surges due to AI and robotics, while labor costs collapse, should be primary targets for taxation,” said Jeon. “Industrial robots are robots, humanoids are robots, and AI agents are also tools that substitute labor. If they replace jobs, they should all fall under the scope of taxation.”

Designing the mechanism itself presents another unresolved challenge. So far, three broad models have been proposed, including taxation on the imputed income of workers displaced by machines. This idea effectively extends social insurance contributions, such as employment and health insurance, to robotic labor.

The second targets excess profits generated by automation, taxing firms on revenue gains relative to the previous year. But this concept is being criticized by some as it is nearly impossible to isolate whether those gains stem from automation, marketing or broader market conditions.

The broader approach focuses on digital usage, such as AI query volume or GPU compute cycles, extending taxation beyond physical robots to software-based systems as well.

“What is urgently needed is a clear governmental definition of what AI and robots represent in budgetary terms, whether they are capital goods, operating expenses akin to labor costs, or software-as-a-service leases,” Professor Lee said. “Without that definition, no coherent tax or labor framework can be properly designed.”

BY SARAH CHEA [[email protected]]