Writing in the October 2026 issue of Taxation Research, Yao Dongmin and co-authors examine where the current tax system falls short as the AI Plus initiative advances. They group AI's economic traits into five points: reliance on data, substitution of labour, intangible output, unclear value attribution and highly concentrated returns. The consequences follow: the tax base does not reach new factors such as data, income taxation is strained by labour replacement, intangibility complicates jurisdictional claims, it becomes unclear who counts as the taxpayer, and concentrated returns weaken redistribution. Their proposals fall into three areas: widen the tax base, rearrange the distribution of tax burdens, and improve how well administration fits the new economy, with the aim of balancing innovation incentives, tax fairness and fiscal sustainability.
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Adaptive reform of the tax system under the AI Plus initiative
An article in the October 2026 issue of Taxation Research by Yao Dongmin, Chu Yuchen and Wang Zihao argues that the AI Plus initiative has reshaped the logic of value creation and exposed growing mismatches with the current tax system. The authors identify five economic features of AI: data dependence, labour substitution, intangibility, ambiguous value attribution and concentrated returns. Each creates pressure on core tax elements such as the object of taxation and the taxpayer, from insufficient tax base coverage and strain on income taxation to jurisdictional disputes and a weakened redistributive function. They propose broadening the tax base, rebuilding the distribution of tax burdens and improving administrative fit, aiming to balance innovation incentives, tax fairness and fiscal sustainability.
2026-11-05