Minimum Rs.1000 wage hike in factories
Factories in Sri Lanka will be increasing salaries of workers by a minimum of Rs.1000 in the coming months which for the first time has not received the traditional endorsement of the Board of Investment (BOI).
Private sector factories in the BOI zones have agreed to bring about a wage revision by a minimum of Rs.1000.
This has traditionally received the endorsement of the BOI Chairman but this year for the first time this endorsement of a salary revision was not there since most in the private sector will not be increasing wages this year.
Since the commencement of the BOI it was the BOI that prescribed the wages but subsequently the companies agreed to prescribe the wage revisions and so it was endorsed as a gesture of goodwill.
Factories are however, struggling further this year as Manufacturers Association Chairman Dhammika Fernando points out the budget 2024 has no pragmatic or proactive measures to improve the country’s exporters’ situation. Moreover, the 18 per cent VAT will create a vicious circle as this will lead to increased prices and a drop in consumption.
He noted that corporate tax still remains one of the highest in Asia and even the professionals were expecting some form of relief on the PAYE tax but that too did not materialise.
It is “not an industry friendly budget at all” on the contrary it’s a “repulsive budget,” Mr. Fernando said.
Factories have said they are unable to increase salaries or pay bonuses but the government is proposing an excessive increase in salaries to public sector workers and taxing those generating foreign revenue to the country. Mr. Fernando also said that the proposed Rs.1000 salary revision is provided alongside the hardship allowance that continues to be paid to workers ranging between Rs.3,000 – Rs.10,000 that was effective since March 2022.
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