An Echelon Media Company
Monday April 15th, 2024

Sri Lanka trade unions call off “strange” anti-tax protest after PMD claims failure

ECONOMYNEXT – More than 40 state-sector trade unions in Sri Lanka called off a protest that disrupted the health and education sector largely after the Presidential Media Division (PMD) claimed that many sectors worked partially despite calls to bring the country to standstill.

The state-sector trade unions have called for a full-day protest on Wednesday (15) against the tax hike.

The government has raised personal income taxes to up to 36 percent to reach its revenue targets which is used to a bloated and inefficient state sector amid a call from the International Monetary Fund to reduce losses in the state-owned enterprises.

The island nation was compelled to pay 86 cents from each rupee it received from tax payers last year to sustain over 1.6 million public servants in government and semi-government institutions. According to official data, one government employee is there to serve every 14 citizens in a country with a 22 million population.

Most teachers did not go for work while state hospitals also saw absence of doctors and other health workers.

The latest tax hike brings doctors, health workers. employees at state-run Ceylon Electricity Board (CEB), Ceylon Petroleum Corporation (CPC), and port employees into the tax net for the first time.

“We hope to continue the protest against the tax hikes, because we have given them a timeline, and we are sticking to it. However, overall, the strike by the alliance has decided to suspend temporarily until next week because the President assured us to give a meeting to discuss,” Chamil Wijesinghe, the spokesman for Government Medical Officers’ Association (GMOA) told EconomyNext.

“The trade union action today was extremely successful. Apart from Cancer, Emergency, Kidney, Tri Forces and Mental Health Hospitals, all the other government hospitals in the nine provinces collapsed due to today’s actions.”

Channa Dissanayaka, the Ceylon Bank Employees Union president, said they will withdraw from the protest until next week after they receive a letter from President Ranil Wickremesinghe on the dates for the meeting.

“This was a strike that was preventable. If they at least gave the assurance for the meeting with the President two days before, then this would not happen.”

“All Schools Collapsed”

Joseph Stalin, the General Secretary of Sri Lanka Teachers’ Union said the strike was extremely successful in the education sector.

“100 percent of teachers supported and the education in all schools collapsed today. If the government does not answer our requests, then we hope to go for serious actions in the future.”

However, employees from many state sector institutions except in the education and health sector said they worked as usual though some had gone on leave.

“We are not on strike but we had less work at our office because of the strike at port,” an official at Sri Lanka Customs told EconomyNext.

The President’s Media Unit (PMD) said most of the state sectors worked despite the protests.

The PMD quoting top officials in each government institution said 20 trains had operated by 0800 hours in the morning, CPC had processed over 300 loads of 6,600 liter of petrol and diesel to maintain normal operations, CEB Shroff and Cashier Union operated as normal, most state banks operated as usual while state-run bus transport service also operated partially despite the trade union protests.

State Finance Minister Shehan Semasinghe said the recent tax hike was to have more emphasis on direct taxes and give relief on indirect taxes.

“What people are asking without knowledge is to increase the percentage of indirect tax. It affects the entire nation. And the most rich person as well as the most poor person will have to pay equal,” Semasinghe told EconomyNext.

Some government officials called the protest “strange” due to the demands of the state-sector trade unions – to reduce the progressive taxes.

“This is a strange protest. Teachers who have nothing to do with the tax hike are protesting on behalf of doctors who earn multiple times of a teachers’ salary and yet don’t pay taxes,” a Finance Ministry official told EconomyNext asking not to be named.

“There is a contradiction in this protest. If they want to reduce taxes, then they should also let the government know how their salaries should be paid. Nobody is thinking about how a government is paying their salary.”

“The protesters don’t know that they are being used by their own colleagues who want to reduce their own tax which is the source for the wage of lower grade officers.” (Colombo/March15/2023)

Comments (1)

Your email address will not be published. Required fields are marked *

  1. Mary Anne Perera says:

    This is true. It was a scam. It was not a protest for the benefit of the middle class and poor but for the richest of the rich who want to get richer.

View all comments (1)

Comments (1)

Cancel reply

Your email address will not be published. Required fields are marked *

  1. Mary Anne Perera says:

    This is true. It was a scam. It was not a protest for the benefit of the middle class and poor but for the richest of the rich who want to get richer.

Iran President to visit Sr Lanka on April 24 anid rising tension, inaugurate Omaoya power project

ECONOMYNEXT – Iranian President Ebrahim Raisi will arrive in Sri Lanka on April 24 on a one-day official visit to inaugurate Tehran-assisted $529 million worth Uma Oya multipurpose development project with 120MW hydro power generation capacity, official sources said.

The announcement on President Raisi’s visit comes two days after Iran launched explosive drones and fired missiles at Israel in its first direct attack on Israeli territory, a retaliatory strike that raised the threat of a wider regional conflict.

“The President is visiting to inaugurate the Omaoya project. He will be on a one-day visit,” an official at Iran embassy in Colombo told EconomyNext.

A Sri Lankan Foreign Ministry official confirmed the move.

This is the first time an Iranian President coming to Sri Lanka Iranian after then President Mahmoud Ahmadinejad’s visit in April 2008.

The Omaoya project was originally scheduled to be completed in 2015, but had been delayed several times due to unexpected issued faced during the project cycle and funding issue after the United States imposed economic sanctions on Iran and economic crisis in Sri Lanka.

The project was started in 2010 and the funding was to be received as loan grant from the Iranian government. However, Iran was able to provide $50 million before the sanctions. Sri Lanka has to bear the cost after the sanctions.

The project includes storing water in two reservoirs with dams before being brought through a 23 km tunnel to two turbines located underground and generating hydro power with a capacity of 120 megawatts and added to the national grid.

After power generation, the water is expected to be brought to three reservoirs while supplying water to 20,000 acres of old and new paddy fields in both the Yala and Maha cultivating seasons.

The Memorandum of Understanding (MOU) for the construction was signed between the two countries in 2007 while Sri Lanka’s Cabinet approved the execution of the contract agreement between the Executing Agency, Sri Lanka’s Ministry of Irrigation and Water Management (MOIWM) of the GOSL and Iran’s FARAB Energy and Water Projects (FC).

When commencing the project on March 15, 2010, the scheduled date of completion of the project was on March 15, 2015. But the schedule completion date was extended to December 31, 2020 due to the unexpected water ingress into the head race tunnel and followed by social impacts.

The trade between the both countries suffered after the US sanctions. However, Sri Lanka inked a deal in December 2021 with Iran to set off export of tea to Iran against a legacy oil credit owed by state-run Ceylon Petroleum Corporation to the National Iranian Oil Company.

Sri Lanka owes $251 million for crude imported before the US imposed sanctions on Iran. (Colombo/April 15/2024)

Continue Reading

Sri Lanka to discuss two contentious points with bondholders: report

ECONOMYNEXT – Sri Lanka and sovereign bondholders are to discuss two matters in the near future which the two sides failed to reach agreement at March talks in London, a media report quoting a top aide to President Wickremesinghe as saying.

Sri Lanka and bondholders had discussed four matters on restructuring international sovereign bonds in late March and agreement had been reached on two, President’s Chief of Staff Sagala Ratnayake was quoted as saying on state-run ITN television.

A restructuring proposal by bondholders was not in line with IMF requirements, and Sri Lanka had sent a counter proposal, he said.

The matters will be discussed at round of talks in the near future.

Sri Lanka was optimistic of reaching an agreement with the bondholders before June, officials have said.

According to matters already in the public domain, sovereign bond holders are keen to get a bond tied to dollar gross domestic product, as they feel IMF growth projections are too low.

In past re-structuring so-called value recovery instruments, a type of warrant, gave their owners extra payments if a country did better than expected and were tied to items like oil prices.

Bondholders had initially proposed bond which would have a lower hair cut initially, and it will have additional hair cuts if growth is low (about 3.1 percent) as projected in an IMF debt sustainability analysis. (Colombo/Apr15/2024)

Continue Reading

BIMSTEC Secretary General visits Sri Lanka, discusses regional cooperation

ECONOMYNEXT – The Secretary General of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), discussed measures to enhance regional cooperation, during his visit to the island last week.

Ambassador Indra Mani Pandey, Secretary General of BIMSTEC visited Sri Lanka from 07 – 12 April 2024, following his assumption of office as Secretary General of BIMSTEC in January this year.

The Secretary General “met with senior officials of relevant Ministries/Agencies to discuss measures to enhance regional cooperation under various BIMSTEC initiatives,” the Foreign Ministry said in a statement.

Several BIMSTEC countries have bilateral trade agreements, such as Sri Lanka and India, Thailand and Myanmar, Sri Lanka and Thailand, but no collective regional agreement to enable intra-regional leverage.

During the visit, Secretary General Pandey held discussions with Ministry of Foreign Affairs officials and paid courtesy calls on the President and the Minister of Foreign Affairs.

Secretary General Pandey participated at an event on “Regional Cooperation through BIMSTEC” organized by the Lakshman Kadirgamar Institute (LKI) on 9 April. (Colombo/April15/2024)

Continue Reading