International Monetary Fund IMF recently said in a report that a direct special tax on generative AI is not recommended, but that theCountries Need to Adapt to AI Developments in All Dimensionstax revenueSystem to balance AI development and labor force protection.
The IMF argues that a special tax on generative AI to mitigate the impact of this most disruptive "automation tool" on the labor market would not be feasible in practice, and would hamper the development of social productivity.
Economies will need to incorporate a focus onGenerative AI Extension of tax policy adjustments to the broader field of "automated investments".
▲ Source: IMF website
Tax incentives for investments in automation aimed at replacing labor are too high in some developed economies, and policies to support such investments need to be reconsidered to mitigate the impact of AI amplifying labor market imbalances;
The opposite is true for some developing economies, where the current use of automated tools to replace human labor would result in a heavier tax burden, which would discourage AI deployment and thus affect social development.
Governments may consider granting tax credits for reducing the loss of labor due to automation, even if these acts are not directed at a specific occupation.
Countries need to raise taxes on capital income, not lower them as developed countries have done in recent decades:
The wave of automation brought on by AI will inevitably erode the labor income tax base, reducing fiscal revenues, if not compensated for by higher capital income tax rates, will affect the scale of long-term government social investment in higher education and welfare, for example;
And lower taxes on capital income will indirectly lead to high unemployment and exacerbate frictions in the labor market;
In addition, the rising economic rents received by dominant firms in winner-take-all markets have led to growing inequality, which cannot be addressed by a capital income tax that is too low.
The IMF argues that, given the large amount of energy consumed by AI servers.Taxing carbon emissions is a good way to reflect AI's ecological impact in the price of the technology.
The IMF also stated thatGenerative AI will also open up more possibilities for the development of the tax system itself:
AI technology could change the information system structure of tax administration, disrupting classical tax theory and urging governments to rethink tax models that were difficult to achieve in the pre-AI era, such as personalized progressive VAT and lifetime income tax.