VAT is key---alternatives fail.

Another proposal is subjecting robots to VAT, since robots can replace humans in the supply of goods or services which are subject to the VAT. To avoid obstacles to the adoption of new technologies and innovation, a simpler approach could be levying a lump-sum tax, payable at the same level by everyone, which would not create distortions in the economy. However, lump-sum taxes present trade-off in terms of equity and distributional effects to be considered. A lump-sum tax would be regressive and bear more on small businesses. Since every business will pay the same amount of robot tax no matter the profits it runs, absorbing the fixed cost of a robot tax would be more arduous for small family businesses than for large companies.