Taxing Automation in Africa: Balancing Innovation and Socio-Economic Equality in the Fourth Industrial Revolution

Abstract

The implementation of artificial intelligence (AI) and robotics is transforming nations worldwide, triggering discussion about their socio-economic impacts and appropriate regulatory responses. While extensively debated in developed economies, this issue remains underexplored in Africa- a region facing unique developmental challenges and opportunities. This systematic review explores the implications of automation, robotics and AI on income inequality, employment and taxation policies, focusing on literature published between 2017 and 2024. For this purpose, as search was carried out in Scopus and Google Scholar databases. A total of 78 papers were found, and after analysing them according to the PRISMA Statement 2020, a total of 36 papers were selected. The review indicates that automation and AI excessively impact low-skilled employees, worsening income disparity, while high-skilled workers benefit from increased salaries. Moreover, analysis indicates that robot taxation and investment in higher education are potential interventions to mitigate these adverse socio-economic effects of technological innovation. The review suggests that government and policymakers should consider tax policies to fund educational institutions to equip citizens with the skills needed in the digital age. The paper offers practical insights for policymakers on robot taxation and labour force and advances understanding by proposing a framework for addressing automation-driven inequality internationally.