Provident fund tax: a backward step

Abstract

The Income Tax Act of 2023 in Bangladesh has stirred unease, mainly in the private sector, by mandating a 27.5 per cent tax on employee welfare funds like provident and gratuity funds. While this might seem like a simple way for the government to increase revenue, the actual implications extend much further. The change not only affects the financial planning of retirees but also impacts long-term employment incentives.