KOLA ADESINA – If a company replaces 120 employees with technology, improves productivity, reduces costs and increases shareholder returns, should it also contribute towards the economic disruption created by that decision?
This is the question behind the growing debate about a “robot tax.”
Automation can improve efficiency, reduce errors, increase output and keep businesses competitive. Executives have a responsibility to pursue those gains, especially where competition leaves little room for inefficiency.
But the consequences do not end at the factory gate.
120 people losing their salaries means 120 households with less income, potentially less tax revenue for government, reduced spending for local businesses and greater demand for retraining and public support.
The company captures part of the productivity gain while society absorbs part of the transition cost.
That is where the case for a robot tax emerges. The argument is not that a machine should receive a tax bill, but whether companies deriving substantial value from replacing human labour should contribute more towards managing the resulting transition.
The opposing argument is equally important. Tax automation too heavily and you could discourage investment, reduce productivity and make businesses less competitive. A company should not necessarily be penalised for finding a more efficient way to produce.
Then comes the difficult question of definition. Is the “robot” a physical machine, artificial intelligence or software that allows one employee to do the work of 5?
Automation also creates jobs and entirely new industries. Automated Teller Machines (ATMs) reduced some banking tasks, but banking did not disappear.
The bigger concern today is the speed of change. A worker displaced by technology may not have the time, resources or skills to move into the opportunities technology creates.
So the question is not, “Should robots pay tax?”
Rather, I would frame it this way:
When technology creates extraordinary productivity gains, who should bear the cost of the transition, and how should the gains be shared?
This is not an argument against automation but a reminder that responsible leadership should look beyond the balance sheet and consider who gains, who carries the cost and what happens next.
About Kola Adesina
Kola Adesina is Chairman of the Board at AXA Mansard and Group Managing Director of Sahara Power Group, with over 26 years of experience across the energy, petroleum and oil and gas industries.
He specialises in leadership, risk management, business development and sustainability, driving innovation, growth, customer experience and stakeholder value while addressing the evolving challenges of the energy sector.
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