Tax hike sparks nationwide strikes – RT World News

Sri Lanka faces widespread work stoppages despite government order banning industrial action

Several key industries came to a standstill in Sri Lanka on Wednesday as more than 40 unions protest a steep tax hike as the island nation grapples with an economic crisis.

The disruptions, which affect hospitals, transport, schools and other sectors, come despite a ban on strikes introduced by President Ranil Wickremesinghe last month, as well as warnings that those who disobey the government directive could lose their jobs.

“Anyone who breaches the Essential Services Ordinance will face the full force of the law,” warned cabinet spokesman Bandula Gunawardana ahead of the work stoppages.

The industrial action was confirmed by union spokesperson Haritha Aluthge on Wednesday following unsuccessful talks with authorities overnight to address a 36% income tax hike announced in January. Electricity tariffs have also increased by two-thirds. The duration of the strikes, according to the unions, will depend on the government’s response to tax protests, as well as soaring electricity costs.

Colombo argues it needs to boost state revenue to qualify for a $2.9 billion International Monetary Fund (IMF) program to help its struggling economy. A decision from the financial lender is expected on March 20.

Sri Lanka is seeking economic aid after defaulting on $46 billion in foreign public debt in April last year. The country’s biggest bilateral creditor, China, agreed to restructure its loan debt, a factor that was a crucial step in potentially securing IMF assistance.

President Wickremesinghe promised that China would receive “a treatment comparable to all our external creditors” amid fears that Beijing could get preferential treatment in debt repayment.

Colombo has been in the throes of an economic crisis since late 2021, with shortages of food, fuel and medicine. The grim financial outlook led to the overthrow of former leader Gotabaya Rajapaksa, who resigned and fled the country days after protesters occupied his official residence in July last year.

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