NE rebel ‘govts’ feel the squeeze, keep taxes fixed
Governments run by extremist groups in Nagaland have refrained from expanding their budgets and revising old ‘tax’ rates after their revenues suffered because of demonetisation last year.
The extremist Isak-Muivah faction of National Socialist Council of Nagaland (NSCN-IM) and its rival Khaplang run parallel governments in their areas. These administrations hold budget sessions and levy taxes — extortion in the language of the state government — on businesses and the salaried class.
The NSCN-IM’s Government of People’s Republic of Nagalim (GPRN) held its two-day budget session last week. This session ended three days before Nagaland chief minister Shurhozelie Liezietsu tabled a ₹1,438-crore deficit budget in the assembly.
“The budget proposal for the 2017-18 fiscal was unanimously approved by the house after thorough deliberation,” Medo Angami, GPRN’s minister for Chaplee (financial) Affairs, said.
Angami did not specify the size of the budget that allocates money to the Naga army and GPRN. But a member of NSCN-IM’s publicity wing said the size of the budget for the next fiscal is similar to that of 2016-17.
The NSCN-IM’s budget for the 2016-17 fiscal was more than ₹180crore, but the outfit’s ‘revenue’ collection suffered because the traders and business houses coughed up less than stipulated ‘shop tax’ and ‘commercial tax’.
A Nagaland-posted central intelligence officer confirmed that “underground taxes” have virtually remained unchanged. “House tax charged by the rebel governments has remained the same at ₹110 per house per year. They are also likely to continue charging ₹250-₹500 to issue work permit or identity cards to outsiders,” the officer said.
Also unchanged is the ‘income tax’ slab for the salaried class, both government and private sector. Each employee in Nagaland has to pay 24% of a month’s gross pay annually to the NSCN-IM.
The officer further said the GPRN has made the commercial and shop taxes variable, linking them to the mood of the market. “Already, the annual tax for big shops has come down from ₹10-lakh to ₹1 lakh or less.”
Members of the extremist groups’ governments agree it has become tougher for them to collect taxes, even at gunpoint. But what is pinching them the most has been a fairly new trend of their “tax collectors” issuing receipts that account for only a tenth of the money collected.
The amount in the receipts goes to the ‘treasury’ of the underground governments while tax collectors pocket the ‘unaccounted’ money.