Income tax will be dead within five years as AI jobs crisis grows, says Monzo founder
Tom Blomfield said income tax could eventually be replaced by a levy on AI infrastructure
Artificial intelligence will make income tax redundant within five years, according to the founder of digital bank Monzo.
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Tom Blomfield said income tax could eventually be replaced by a levy on AI infrastructure as the technology continues to reshape the jobs market.
“I don’t think we’ll tax human labour, we’ll tax compute, [meaning systems like] data centres, and then we will use the proceeds to pay for government," the Monzo founder said on The Rest is Money podcast.
He argued that AI systems are already outperforming humans in some narrow tasks and said many white-collar roles, including tax accounting, could soon require far fewer workers.
He added: “These tools are performing beyond university professor level – they are actually beating humans in narrow domains. They’re not yet generalisable, so they’re very narrow geniuses, but by the end of 2026 they will be generalisable.”
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His comments come amid growing concern over AI’s impact on employment.
Jobs site Adzuna said adverts for entry-level roles were down 35pc compared with November 2022, when ChatGPT launched.
Morgan Stanley has also warned Britain could be especially exposed to an AI-led jobs shock because of its heavy reliance on professional services.
The services sector accounted for 81 per cent of economic output last year.
The debate has raised fresh questions over how governments would replace lost tax revenue if fewer people are in work.
Last week, OpenAI – the founder company behind ChatGPT – suggested policymakers may need to shift towards taxing capital, corporate profits and long-term AI-driven returns, potentially including a “robot tax” on automated labour.
Income tax and National Insurance contributions remain the two biggest sources of government revenue in the UK, accounting for 42 per cent of the total, while taxes on capital gains, property sales, stamp duty and inheritance tax make up a much smaller share of four per cent.
However, taxing AI services could prove politically and practically difficult, particularly as previous attempts to impose levies on major US tech firms have faced resistance.