News
Income tax protests: unions threaten to shut country down
ECONOMYNEXT –A collective of trade unions and professional associations representing high-income earning public servants has threatened to launch a nationwide general strike on March 01 if the government doesn’t address their concerns about a personal income tax hike.
Media spokesman of the Federation of University Teachers Association (FUTA) Charudaththa Illangasinghe told reporters on Friday January 17 that unions and associations representing education, power and energy and other utilities, ports, health and banking sectors plan to engage in large scale trade union action starting next week against the government’s recently introduced tax policy.
“We all decided unanimously today to agitate against this act and to reject it.
“We demand that the government immediately resolve this issue, or else by next week we will go into massive trade union action. The country may be shut down,” said Illangasinghe.
President of the Petroleum Public Employees Union Ashoka Ranwala said the unions have reached a “historic decision”.
“We have announced a black week from February 22. On March 01 we will reconvene and review the situation and on that day we plan to launch a nationwide general strike,” he said.
Trade unions and professional associations in Sri Lanka representing high income earners in the public and private sectors have been protesting a recent hike in personal income taxes that sees the cash-strapped government collect from anyone earning over 100,000 rupees a month.
Sri Lanka’s new tax regime has both its defenders and detractors. Critics who are opposed to progressive taxation said it serves as a disincentive to industry and capital which can be invested in business. They argue that a flat rate of taxation is implemented where everyone is taxed at the same rate.
Others, however, contend that the new taxes only affect some 10-12 percent of the population and, given the country’s economic situation, is necessary, if not vital.Critics of the protesting workers argue that most of the workers earn high salaries that most ordinary people can only dream of, and though there may be some cases where breadwinners could be taxed more equitably, overall, Sri Lanka’s tax rates remain low and are not unfair.
In terms of the provisions of the Establishments Code on payment of festival advance to government officers, there’s a possibility of obtaining rupees 10,000/- as an advance for celebrating festivals of Theipongal, Ramazan, Sinhala and Hindu New Year, Wesak, Deepavali, and Christmas as well as for pilgrimages (Sri Paada pilgrimage and Hajj pilgrimage).
Provisions have been given to recover the said advance in 08 installments or if required earlier without interest. It has been proposed by the Budget 2026 to increase the said festival advance up to rupees 15,000/-.
Accordingly, the Cabinet of Ministers granted approval to the proposal submitted by the Minister of Public Administration, Provincial Councils and Local governments to revise the relevant provisions so that the festival advance can be increased up to rupees 15,000/- .
As per the approval given by the cabinet meeting held on 02-06-2025, action is being taken at present to offer the underutilized lands/properties of the Sri Lanka State Plantation Corporation, the Janatha Etate Development Board, and the Elkaduwa Plantation Company which are under the Ministry of Plantation and Community Infrastructure which have been identified under stage one to suitable investors.
Accordingly, the Cabinet of Ministers has approved the proposal presented by the Minister of Plantations and Community Infrastructure to provide following lands/properties on a lease basis to the suitable investors for optimal utilization following the prescribed procurement procedure.
• underutilized lands/properties identified under stage two owned by the Sri Lanka State Plantation Corporation, the Janatha Estate Development Board, and the Elkaduwa Plantation
Company,
• The Mawarala watte land and the Tea factory 40.48 hectares in extent, located in Matara District belonging to the Tea Shakthi Fund.
• The underutilized land of 1,541 hectares in extent of Kondachchi Estate is enjoyed by the Sri Lanka Cashew Corporation.
The drafting of the National Fisheries and Aquaculture Policy has commenced with the objective of equitable distribution of the benefits of the fisheries industry and the sustainable management of fisheries and aquaculture. This policy has been updated from time to time according to current requirements. However, steps have not been taken to obtain the approval of the Cabinet of Ministers for that purpose.
According to the policy declaration of the present government, ‘Vistas of Prosperity and Splendor’ the National Fisheries and Aquaculture Policy has been redrafted, updating the aforementioned policy in line with the economic and development objectives of the government.
The recommendations of the Department of National Planning have been received for the drafted policy.
Accordingly, the Cabinet of Ministers has approved the proposal presented by the Minister of Fisheries, Aquaculture, and Marine
Resources to implement the National Fisheries and Aquaculture Policy, integrating it with other relevant policies.
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Festival advance for government officers to be increased
Providing underutilized lands/properties to suitable investors for optimal utilization.
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