Sri Lankan trade unions on Wednesday observed a one-day token strike to protest against the government's steep hike in tax and utility rates. Meanwhile, daily life in the crisis-hit island nation has been brought to a standstill, and services disrupted in key areas such as airports, ports, and banking.
Trade unions belonging to various sectors called for the strike after defying the essential services order issued by President Ranil Wickremesinghe. During the strike, an appeal was made to the government to roll back the tax hike.
President Wickremesinghe, who is also the country's finance minister, raised corporate taxes from 13 percent to 30 percent in January, from 24 percent last year after raising VAT (value-added tax) to 15 percent.
The Sri Lankan government introduced tax increases in January. It is believed that this was done at the demand of the International Monetary Fund (IMF).
He said, 'We have started the strike from 7 am today till 7 am tomorrow. We will not accept orders for essential services. Port trade union leader Niroshan Gorakanage told the media, “This is a move to add to our difficulties with the tax hike.
He said eight ships arriving and departing from Colombo port on Wednesday were affected by the strike. Channa Dissanayake, an official of the bank employees' trade union, said work in two state-owned banks, including the Central Bank of Sri Lanka, has been halted on Wednesday.
Teachers' trade union spokesperson Joseph Stalin said teachers are working by wearing black armbands to protest against the government's move. Charuka Ilangsinha of the University Teachers Federation said the strike would be resorted to until the government rolls back the tax hike.
Sri Lankan President cum Finance Minister Wickremesinghe has said that increasing taxes is a necessary step to overcome the current economic crisis. However, trade unions allege the tax revision was done to appease the IMF as the island awaits approval of a $2.9 billion bailout package from the global debt provider.
Wickremesinghe said Sri Lanka needed to increase its tax revenue to 2019 levels. In 2019, Wickremesinghe's predecessor Gotabaya Rajapaksa drastically reduced tax revenue, ignoring demands for an IMF bailout. The current President said that he is aware of the burden of high taxes on the people, but the high taxes are part of the rescue operation of the Sri Lankan economy.
The IMF approved a $1.30 billion bailout package to Sri Lanka in September last year, which has been pending for over four years. Wednesday's strike is likely to add to the uncertainty surrounding the upcoming local body elections. The Election Commission announced that the local body elections will not be held on March 24 as planned, and a new date will be notified on March 15.
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