IMF hints of possible relief to protesting trade unions at next review

The International Monetary Fund (IMF) has hinted at the possibility of the government being able to revise some of the taxes that have been imposed as part of the staff level agreement with Sri Lanka once the programme comes up for review in six months.

IMF officials conveyed this to representatives of trade unions during a virtual roundtable held on Friday (24). The virtual meeting was held on the initiative of the IMF.

The IMF had initially reached out to the Government Medical Officers’ Association (GMOA), the Ceylon Teachers’ Union (CTU) and unions of the Sri Lanka Ports Authority (SLPA) to hold the virtual roundtable. However, officials had made it clear that unions from other sectors too can attend.

Most unions coming under the Professionals’ Trade Union Alliance (PTUA) attended Friday’s meeting, GMOA Media Spokesman Dr. Chamil Wijesinghe told the Sunday Times. The IMF was represented by officials from its headquarters in Washington D.C. and its Mission in Sri Lanka.

IMF officials briefed the trade unions on their programme for Sri Lanka and the type of reforms they expect the country to make as part of the agreement. Unions in turn, explained why they were opposed to some of the tax reforms, particularly the move to impose a Pay As You Earn (PAYE) tax on anyone earning Rs. 100, 000 a month, said Dr. Wijesinghe.

“We made it clear that we are prepared to pay taxes but stressed that this tax regime is grossly unfair owing to a variety of factors including the high cost of living, the issue of professionals being underpaid and fuel costs,” he added.

Dr Wijesinghe said officials accepted that they had legitimate issues and assured that it will study the tax proposals submitted by the PTUA.

The IMF had noted during the discussion that there is a possibility of some of the taxes being revised once the programme comes up for review, the GMOA official added. The IMF also asked unions to continue maintaining a dialogue with its Sri Lanka Mission,

The Ceylon Electricity Board Engineers’ Union (CEBEU) meanwhile, spoke on the reforms that the government is planning for the CEB, Union President Nihal Weeraratne revealed. “The IMF is not asking for the CEB to be privatized. They know that the CEB is providing a service so it cannot be a profit driven body. However, we all want to ensure that the CEB is not a loss making entity and that it can continue providing electricity 24/7 to customers while keeping the cost of electricity manageable for them.”

The CEBEU explained that reforms should be enacted across the entire power sector and not just the CEB remarked Mr Weeraratne.

The CTU chose not to attend Friday’s meeting. In a letter addressed to the IMF, CTU General Secretary Joseph Stalin noted that his union believes that issues concerning economic policies of the country should be discussed with the government in power, and not with the IMF as the latter does not hold a popular mandate to act on the government's behalf.

The PTUA meanwhile, is weighing its options for further trade union action as they are yet to be given a meeting with President Wickremesinghe to discuss an “interim solution” proposed by authorities until the IMF agreement comes up for review. The earlier understanding was that the meeting would happen this week after the IMF approved a bailout for Sri Lanka.

By Sandun Jayawardana