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As GST era dawns, Nagaland wants rebel governments to levy one ‘tax’

Without it, people may have to continue paying multiple taxes.

india Updated: Jul 01, 2017 07:13 IST
Rahul Karmakar
Rahul Karmakar
Hindustan Times, Guwahati
GST,Nagaland,National Socialist Council of Nagaland
NSCN-IM rebels around their camp and the outfit's leader Thuingaleng Muivah with others. (HT File Photo)

At the stroke of midnight, India might be switching to one-nation-one-tax, but in Nagaland, many would be forced to continue paying an array of levies to underground governments run by rebel groups.

Now, locals in the northeastern state want the militant groups to standardise rates and usher in a common “tax” collection system, on the lines of the Goods and Services Tax (GST) that replaces a host of state levies to stitch together a common national market.

Read — GST rollout: A look at tax rates and how it will impact your basic expenses

The GST-like one rebel government mechanism, locals in Nagaland say, would kill two birds with one stone – ease the fiscal burden on the common man who ends up paying half his earnings as taxes to non-legitimate governments and unify all rebel outfits for the “Naga political cause” of uniting all Naga-inhabited areas under one administrative umbrella.

“We are insisting on one tax, and an end to multiple taxes will make the Naga political groups unify,” said Khekaghu Meru, co-chairman of Against Corruption and Unabated Taxation (ACAUT), a citizens group formed in 2014 to protest extortion and multiple levies. The group’s advocacy has previously forced rebel groups to slash rates and reduce exorbitant levies for shopkeepers and small traders.

Most communities in Nagaland, including the Nagas, are listed as scheduled tribes and are thus exempt from income tax under section 10(26) of the Income Tax Act. But almost everyone – police officers too – pays income tax to several underground governments, the rate varying from 12-24% of a month’s salary or income.

Nagaland has at least nine extremist groups that impose an array of ‘donations’ – income, shop, commercial and house tax – to generate ‘revenue’ for their governments. The rebels say it is their right to collect such taxes but do not specify if they spend the taxpayers’ money for civic projects.

Four of these groups are factions of National Socialist Council of Nagaland. The Isak-Muivah faction is the most systematic of the tax collectors followed by Khaplang, Unification (also called Niangpao Konyak-Kitovi Zhimomi group) and Reformation factions. The older Naga National Council has five tax collection groups.

Fed up of being overtaxed by multiple governments, ‘taxpayers’ in Nagaland formed ACAUT in January 2014, a month after a mass rally in Dimapur town to protest random taxation.

ACAUT has been speaking up against multiple taxation and extortion by rebels affecting projects such as widening of Dimapur-Kohima highway. Rebels have responded by ‘banning’ ACAUT and threatening its members.

Meru made it clear that ACAUT isn’t against paying taxes to parallel governments but demand a common structure.

“Multiple taxes have not stopped, but the mass movement has brought in some changes. The underground governments no longer do things in a blatant manner, they are more cautious now. And we have a platform to take up issues with the government, in the state and at the Centre, though they have not been of much help,” Imlimar of Business Association of Nagaland, an ACAUT constituent, told HT.

The campaign against unabated taxation also made NSCN-IM reduce the income tax from 24% to 12% this year. Annual tax for big shops has also come down from Rs 10-lakh to Rs 1 lakh, so has the limits of other taxes.

Many blame Delhi for legitimising the rebels’ tax collection by giving them a free hand after inking peace deals, with NSCN-IM in July 1997 and the other groups later. Factors such as alleged nexus between the state government and the extremist groups and sympathy with the Naga political issue make policing difficult.

“We do take action against illegal taxation drives if there are specific complaints. But the problem is, people express resentment on the streets or through the media without coming forward to lodge a complaint,” a senior police officer said, declining to be quoted.

“We are 100 years behind the rest of the country. One can keep on fighting, but at the end of the day, individual issues take the sting out of public movements. Everyone from all walks of life, including the UGs, have to come together to thrash out a simplified, unified tax structure,” Khekiye K Sema, retired IAS officer and ACAUT advisor, said.

First Published: Jul 01, 2017 07:13 IST