IMF holds talks with unions, taxes may be revised in six months

Virtual roundtable meeting takes up crucial issues, including CEB reforms

The International Monetary Fund (IMF) has indicated 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. 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 could 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 Colombo.

IMF officials briefed the trade unions on their programme for Sri Lanka and the type of reforms they expected the country to make in terms of the agreement. The 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 more than 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 high fuel costs,” he said.

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

The IMF had noted during the discussion that there was a possibility of some of the taxes being revised once the programme came 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 was planning for the CEB, Union President Nihal Weeraratne said.

“The IMF is not asking for the CEB to be privatised. The Fund knows 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, Mr Weeraratne said.

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 believed that issues concerning the country’s economic policies should be discussed with the government, and not with the IMF which did 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 it is yet to be given an appointment for a meeting with President Wickremesinghe to discuss an “interim solution” proposed by the authorities until the IMF agreement comes up for review. The earlier understanding was that the meeting would take place this week after the IMF approved a bailout for Sri Lanka.