By Ibu Sanjeeb Garg
Beating the Rhetoric
For the last few years now scientists around the world are speculating over the next round of Industrial Revolution. The fourth Industrial Revolution is building on the third which was in turn the digitalisation that had been happening since the middle of the last century. Automation, artificial intelligence and Internet of Things (IoT) have changed the narrative in the last few years.
Each year more and more employees are being shifted out of factory floors as machines begin to take over their place. Even in India companies like Flipkart are increasingly beginning to employ mechanised robots in case of humans in their warehouses as well as their floor operations. However this rapid transformation of how humans and machines are beginning to interact with each other has opened debates on various fronts. They range from the questions of employment for humans to legal issues. This debate on the fourth industrial revolution however acquired a whole new dimension when Bill Gates the founder of Microsoft expressed the need for taxing robots. Gates opines that the funds generated out of it would help those who have lost their jobs to machines and slowing down the automation process for some more time.
This brings into focus the theme of taxing robots. The major issue is the fundamental understanding of how if robots are taxed the legal implications of the same are to be tackled. Let us assume a country like India starts imposing taxes on income earned by robots. The first question would be what would be classified as a robot. Whether a machine that has a human form and has substantial decision making capacities can be considered a robot or a mechanised arm. If income tax slabs would be imposed on them then variations of how robots are can perhaps be one basis. The second question that must be asked is how the income would be taxed. Would they be taxed at the source or where it would accrue. If they would be taxed at accrual then it is obvious that robots cannot have an accrual account. Thus the only logical conclusion can be that if such a tax is imposed then it must be deducted at source. This in essence means an increased cost or a form of tax for companies employing machines. And this, in turn in all probability means that companies would heavily undervalue the work and “salary” being given to robots in order to cut their legal expenses.
Another aspect that has to be explored is the probability of a robot/employer defaulting on the tax payment. Who would be liable then would it be the robot or the employer who had to deduct tax. If legally a robot is held to be at fault then would it mean redefining our legal laws as well as civil code of procedures to bring robots under the preview? As the presupposition would have shown the mere issue of taxing robots would open a wide gambit of legal issues and fundamentally alter the understating of legal jurisprudence in the country.
This brings us to the second fundamental question of how the fourth industrial revolution has actually led to a decrease in employment and hence it must be compensated. The theory of such arguments goes back to the First Industrial Revolution when Luddites opposing the same had violently argued against the setting in of the age of machines. Yet if anything today the employment numbers are only higher despite a growing and an increasingly burgeoning world population. Researchers around the world have theorised that while introduction of machines have lead to loss of jobs for some yet sometimes they have created demand for new kind of jobs. Let us take the example of the humble telephone. The earliest telephone industry which was majorly landline could employ a few in various positions. With the onslaught of the mobile devices the jobs in traditional phone industries have come down. However the expansion of mobile phones has led to an increasing number of jobs in this sector from salesman to mechanics that can repair phones. In an increasingly competitive environment, the expansion of companies has only resulted in more jobs.
Hence it cannot be said with certainty that introduction of robots would eventually decimate all human jobs. The trend would be a temporary dip before opportunities open in new sectors. However what would change is the kind of work. People in the industrial manufacturing sector perhaps would move from assembly lines to design engineers who would manufacture the robots that would control assembly lines. Increased production would also mean increased employment opportunities. Hence while the Fourth industrial Revolution stands in the cusp of an exciting era to downplay the same using the time tested theory of “taking away jobs “is perhaps unwarranted.
If anything the introduction of robotics and automation opens up exciting opportunities for human race. Hence theories like taxing robots reeks of being a more refined version of the ethos of protectionism. As we enter a new age the future looks exciting and looks filled with promises.
( Views expressed by the author are personal)