• CTU slams IMF on discussions
• Govt. can now change PAYE: GMOA 
• By Buddhika Samaraweera

The International Monetary Fund (IMF) has informed a group of local trade union representatives on Friday (24) that the fund will not oppose changes to the tax system in future if new measures do not harm the given tax revenue target.

The IMF has stressed that it does not interfere in matters such as taxes with regard to the amounts to be collected, from whom, and the relevant percentages.

The fund had invited trade unions, including the Government Medical Officers’ Association (GMOA), the Ceylon Teachers’ Union (CTU), and those within the Central Bank of Sri Lanka (CBSL) and the Sri Lanka Ports Authority (SLPA), for a virtual discussion on tax reforms and other related matters.

However, the CTU in a written response had objected to trade unions discussing the matter with the IMF, as such matters fell within the purview of the Government.

The GMOA and several other trade unions had attended the discussion which was held on Friday (24), while the CTU had declined the invitation due to what it claimed was an absence of responsible Government policymakers and a broader trade union representation.

When contacted by The Daily Morning, GMOA Media Spokesman Dr. Chamil Wijesinghe said that the trade union representatives had explained to the IMF officials during the discussion the issues that had arisen due to high inflation and the social, economic, and political issues that may arise due to recently-introduced tax reforms.

“We have already presented a programme through which the Government can raise tax revenue while also providing relief to professionals. We have never said that we cannot pay taxes, but that they should be affordable. 

“As the Government has stated that tax reforms will be amended when the IMF programme is reviewed in the coming months, we asked about the IMF’s stance on this. In response, they clearly pointed out that they did not interfere in matters such as who taxes are collected from and at what percentages. 

“All they expect from the Government is to achieve the tax revenue target. They said that they would not oppose tax reforms which would not harm the achievement of that target,” he explained.

Noting that the Government now had an opportunity to amend tax revisions and provide relief to professionals in a manner which would not harm the achievement of the set target, Dr. Wijesinghe said that the Government was however focused on achieving tax revenue targets in the easiest possible way via the Pay As You Earn (PAYE) tax. 

“This is the easiest way to collect taxes. All they have to do is to deduct it from their salaries. There is no need to open files. That is why the Government is carrying out this programme,” Wijesinghe charged.

He further said that the trade unions had already requested the Government to provide an interim solution if the issue could not be resolved immediately. Until such a solution was provided, all forms of programmes against tax policies such as protest movements would continue, he said.

“What the Government kept claiming was that the IMF did not like the amendment of tax reforms, but we came to know that there is no truth to that during the discussion we had with the IMF,” Dr. Wijesinghe added.

Meanwhile, CTU General Secretary Joseph Stalin had informed the IMF in writing that they did not wish to engage in any discussion with IMF officials in the absence of responsible Government policymakers and a broader trade union representation.

“As a trade union, we firmly believe that the issues concerning economic policies should be discussed with the Government and not with the IMF, as the latter does not hold a popular mandate to act on behalf of the Government. 

“It is the responsibility of the Government to maintain a transparent policy in matters affecting social and economic rights of the people and inform the trade unions and other organised sections in society accordingly,” read the letter which was seen by The Daily Morning.

The CTU further stated in the letter: “Your (IMF) invitation for a discussion with selected trade union delegates raises serious concerns, as it interestingly overlaps with a recent statement made by President Ranil Wickremesinghe during a meeting with union representatives.

“Speaking to the union delegates, he refused to take the responsibility for imposing new taxes while stressing that any opposition to the new tax policy should be discussed with the IMF, even volunteering to organise a meeting between the IMF officials and trade union delegates. It confirms the well-grounded fears of the masses whether the responsibility of making policy decisions on economic matters has been entirely taken over by the IMF.”

“Except for the IMF’s press statement and Staff Report on Sri Lanka which was tabled in Parliament, no genuine step has been taken by the Government to inform the people about the precise content of the IMF Staff-Level Agreement, which still remains unknown to the wider public. 

“The Government has repeatedly failed to reveal the exact conditions, which the two parties agreed upon for Sri Lanka to receive a 48-month extended arrangement under the Extended Fund Facility of the IMF. In the absence of precise information on the matter, people are left with no option other than coming to conclusions on their own by observing the disastrous economic measures introduced in the past few months,” the letter added. 

Attempts by The Daily Morning to contact the State Minister of Finance and the Secretary to the Treasury on the views expressed by the IMF failed.