Several key industries came to a halt in Sri Lanka on Wednesday as more than 40 unions protested a sharp tax hike as the island nation grapples with an economic crisis.

The disruptions, which affect hospitals, transport, schools and other sectors, come despite a ban on strikes introduced by President Ranil Wickremesinghe last month, as well as warnings that those who disobey the government directive could lose their jobs.

“Anyone who violates the order for essential services will receive the full force of the law,” warned cabinet spokesperson Bandula Gunawardana ahead of the work stoppages.

The union action was confirmed on Wednesday by union spokesman Haritha Aluthge after failed overnight talks with authorities aimed at tackling an income tax increase of up to 36% announced in January. Electricity rates have also increased by two-thirds. The duration of the strikes, unions say, will depend on the government’s response to tax protests and rising electricity costs.

Colombo claims it must raise state revenues to qualify for a $2.9 billion package from the International Monetary Fund (IMF) to help its struggling economy. A decision from the financier is expected on March 20.

Sri Lanka is seeking economic relief after it defaulted on $46 billion in foreign government debt last April. The country’s largest bilateral creditor, China, has agreed to restructure its loan debt, a factor that was a critical step in potentially securing IMF support.

President Wickremesinghe has vowed that China will receive “comparable treatment for all our external creditors” out of concern that Beijing could receive preferential treatment in debt repayment.

Colombo has been in the grip of an economic crisis since the end of 2021, with shortages of food, fuel and medicines. The poor financial outlook led to the fall of former leader Gotabaya Rajapaksa, who stepped down and fled the country days after protesters occupied his official residence in July last year.

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