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Sri Lankan trade unions to hold a nationwide strike on March 1 as tax hikes not withdrawn

Wickremesinghe said Sri Lanka needed to raise its tax revenue to that of 2019

SRI LANKA-RIGHTS/UN Sri Lanka flag | Reuters

Sri Lankan trade unions are all set to defy an essential services order issued by President Ranil Wickremesinghe by going ahead with their one-day token strike scheduled on March 1 to protest the government's tax and utility rates hikes.

The trade unions belonging to various sectors had earlier urged the Sri Lankan government to withdraw its tax hikes and warned to hold a nationwide strike on March 1 if their demands were not met.

The Sri Lankan government introduced tax hikes with effect from January widely believed to be on demand by the International Monetary Fund (IMF).  Wickremesinghe last night gazetted the essential services order covering public transport, goods transportation, and all work related to ports and airports.

The essential services gazette was issued after the trade unions gave notice of strike action, a member of the Teachers' Trade Union, Joseph Stalin said.

We will go ahead as planned with strike action against these illegal tax orders, Ranjan Jayalal of the electricity workers' trade union said.

The doctors, teachers, and bank employees including those from the central bank are said to join the token strike.

If the government does not take action to reverse the tax proposals, we will go into more serious action from next week, Channa Dissanayake of the bank employees union said.

Wickremesinghe, also the finance minister, said raising taxes to get over the current economic crisis was an essential step.

However, the trade unions allege that 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 had 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.

With assurances from creditors, the 2.9 billion dollar facility could get the IMF board approval in March.

Tomorrow's industrial action is set to add to the political heat generated by the uncertainty over the conduct of the upcoming local election.

The Election Commission had 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.

Meanwhile, opposition parties blame Wickremesinghe for trying to sabotage the election, fearing a loss, and accuse him of influencing state officials and the elections commission against holding the polls. 

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