Artificial Intelligence (AI) is replacing jobs, and it could fundamentally reshape how governments raise revenue. As automation continues to replace human labour across industries, the founder of UK-based digital bank Monzo, Tom Blomfield, suggested that income tax may be replaced by a levy on AI infrastructure within the next five to six years.
Speaking on The Rest is Money podcast, Blomfield argued that governments may shift toward taxing “compute,” meaning data centres and AI systems, rather than human workers.
“I don't think we'll tax human labour, we will tax compute, data centres, and then we will use the proceeds to pay for the government,” he said in a conversation with host Robert Peston.
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AI Is Outperforming Humans
Blomfield noted that AI systems are already outperforming humans in specific tasks and warned that many white-collar roles, including tax accounting, could soon require significantly fewer workers.
“These AI tools are performing beyond university professor level; they are actually beating humans in narrow domains. They are not yet generalizable, so they are very narrow geniuses, but the progress is happening so quickly that by the end of 2026, they will be generalizable,” he added.
To support his claims, he cited remarks from the CEO of Anthropic, Dario Amodei, and Sam Altman of OpenAI. He noted that both of them have predicted significant disruption in knowledge-based professions.
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AI Takes Over Routine Tasks
Concerns about AI-driven job losses are already reflected in industry trends. At Spotify, co-CEO Gustav Söderström revealed during an earnings call that AI tools are now deeply integrated into the music platform's engineering workflows. “Our most experienced developers have not written a single line of code since December,” he said.
Meanwhile, job platform Adzuna reported that entry-level job postings have dropped 35 percent since late November 2022, when ChatGPT was launched.
Financial institution Morgan Stanley has also warned that the UK economy could be particularly exposed to AI disruption due to its heavy reliance on professional services. The services sector accounts for more than 80 percent of the country's economic output.
Rethinking Taxation In The AI Era
The debate over how to replace lost tax revenues is gaining urgency. In a recent paper, the parent company behind ChatGPT, OpenAI, suggested that policymakers may need to shift toward taxing capital, corporate profits, and long-term AI-driven returns. Proposals include the introduction of a “robot tax” on automated labour.
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