Crisis-hit Sri Lanka's public workers protest power tariff, tax hikes

People wait inside a shuttle ambulance vehicle outside a hospital during a strike against huge tax increase in Colombo, Sri Lanka, March 1, 2023. REUTERS/Dinuka Liyanawatte

COLOMBO (Reuters) - Public sector staff at Sri Lankan hospitals, banks and ports walked out on Wednesday, with some taking to the streets and other employees including teachers dressing in black, in a widespread protest against soaring living costs.

The island is grappling with its worst economic crisis since gaining independence from Britain in 1948, beset by inflation above 50%, a shortage of foreign exchange, a plummeting currency and a steep recession.

The government has this year hiked income taxes to up to 36% and raised power tariffs by two thirds as it bids to put its public finances and debt in order and qualify for a $2.9 billion International Monetary Fund (IMF) bailout provisionally agreed in September.

Public sector unions have called for a fairer tax regime, and around 2,000 port workers, already staging a work-to-rule, on Wednesday held a demonstration in support of that demand during their lunch break in the commercial capital Colombo.

"We are protesting because we are finding it difficult to live. This income tax bill must be removed if not we will ensure that there are more problems for this government," Niroshan Gorakanage, Convenor for the Ports Trade Union Alliance told reporters.

Elsewhere, hundreds of government employees wore black clothes and armbands and flew black flags outside state buildings.

Most banks across the country were closed for the day as banking unions joined the strike, and government hospitals were hit as nurses staged a four-hour strike and doctors joined demonstrations, union officials said.

President Ranil Wickremesinghe told parliament last week that the tax reform was needed to shore up public finances under the terms of the IMF loan.

(Reporting by Uditha Jayasinghe; editing by John Stonestreet)

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