The one-day token strike organised by Sri Lanka’s trade unions on Wednesday to protest the government’s massive tax and utility rate hikes has brought daily life in the crisis-hit island nation to a grinding halt and disrupted services in key sectors like airports, ports and banking.
The trade unions belonging to various sectors called the strike after defying an essential services order issued by President Ranil Wickremesinghe and urged his government to withdraw its tax hikes.
In January, President Wickremesinghe, who is also the country’s finance minister, hiked corporate taxes to 30 per cent from 24 per cent, after raising VAT (Value Added Tax) to 15 per cent last year.
The Sri Lankan government introduced tax hikes with effect from January widely believed to be on demand by the International Monetary Fund (IMF).
“We have launched the strike from 7 am today to 7 am tomorrow. We won’t accept the essential services order. This is an action to highlight our hardships with tax increases,” Niroshan Gorakanage, a port trade union leader, told PTI.
He said the eight ships that were set to arrive on Wednesday and ships that were scheduled to leave the Colombo port were hit by the strike. Channa Dissanayake, a bank employees trade union official said work in the two state banks, including the Central Bank of Sri Lanka have been curtailed on Wednesday.
Joseph Stalin, the teacher’s trade union spokesman said teachers were wearing black armbands to work to protest the government’s move.
Charuka Ilangasinha of the University teachers federation said the strike would be resorted to until the government rolled back the tax hikes.
Wickremesinghe said raising taxes to get over the current economic crisis was an essential step. However, trade unions allege the tax revisions were meant to please the IMF as the island awaits a nod from the world lender for a 2.9 billion dollar bailout package.
Wickremesinghe said Sri Lanka needed to raise its tax revenue to that of 2019.
In 2019, Wickremesinghe’s predecessor Gotabaya Rajapaksa drastically reduced tax revenue while ignoring calls for an IMF bailout.
The president has said he was aware of the burden placed on people by higher taxes but the high taxes are part of the rescue operation of the Sri Lankan economy.
The IMF in September last year approved Sri Lanka a 2.9 billion dollar bailout package over 4 years pending Sri Lanka’s ability to restructure its debt with creditors — both bilateral and sovereign bondholders.
Wednesday’s strike is all set to add to the uncertainty over the upcoming local body polls.
The Election Commission announced that the local body elections would not be held on March 9 as planned, and a fresh date will be notified on March 3.