IMF boss warns on AI ‘tax erosion’ if jobs are wiped out

The head of the International Monetary Fund has warned financial ministers that widespread AI adoption could erode tax bases across the world as incomes are squeezed by the technology. Kristalina Georgieva, the managing director of the IMF, said governments may be ill-prepared for a potential slump in tax revenue brought on by AI s impact on the labour market.  At the fund’s summit in Bangkok, Georgieva has issued a series of warnings on the impact of AI, calling the technology a “slow-moving tsunami” that could affect 60 per cent of jobs in wealthy countries.  In a blog post on Thursday, Georgieva suggested governments would need to “make hard choices” and implement vast tax reform to shift revenue streams from labour to other areas such as land or investment.  “AI may raise growth, but it could also reduce labour income, increase inequality, and erode the tax base,” Georgieva said. “Countries will need fiscal space to invest in infrastructure and skills, and cushion the i