Multiple taxations destroying the economy

P Achumse Yingbthonger
Indian Institute of Mass Communication

For decades now the local entrepreneurs and business houses big and small have been silently bearing the burn of unabated taxation and extortion levied by various Naga National Political Groups(NNPGs) active in Kiphire, NNPGs call it tax to run their ‘revolutionary government’. Calls for doing away with multiple system of taxation by various NGOs in order to encourage local entrepreneurship, seems out of sight for now.


Every business enterprise, big or small pays tax to the NNPGs, according to the rate fixed, depending on the income of the shop. NNPGs claimed this tax is needed to further the ‘national cause’ at the same time it shows self-rule.


Senior public figure remarked ‘normal tax is given all over Nagaland, so we cannot totally stop tax collection in Kiphire, but if we keep on going at this rate of multiple tax system, business houses will have no option but to increase the price of goods which will have severe economic impact on Kiphire’.


But how does this modus operandi of tax system work? Tax is collected from trucks right from Dimapur up to Kiphire according to the goods and merchandise it is carrying, at least 40-50 trucks enters Kiphire every month.


Because of random collection of vehicle tax, when Kiphire road was totally cut-off for more than a month because of incessant rain and landslides, truck owners were not willing to send their trucks, which also led to shortage of essential commodities.


Subsequently on reaching Kiphire, trucks owners pay around 7-8 times as tax to different NNPGs. Non-local business houses are also heavily taxed apart from general tax which the NNPGs call it Yearly tax, Population enrolment tax, House tax, Army ration tax and ILP to whichever factions active in Kiphire.


‘We are over burden but we also cannot stop taxation as everyone is giving, including government employees, we are only giving out of fear’ said John (name changed). ’Kiphire has the potential to be self-reliant economically NGOs, Community and intellectuals should come together to control unabated taxation, because even a single rupee can make a difference in economic growth in society’.


According to, Tsali Mongzar President Citizen Welfare Society (CWS), suppliers and business houses are forced to give tax, they have no option, it is becoming excessive.


‘The problem here in Kiphire is that NNPGs don’t always follow the limit set by their higher authority, ultimately the consumers has to suffer as shopkeepers have no other option but to raise price of goods to recover the amount, we are eating and destroying ourselves’.


Nagas’ are listed as Scheduled Tribe and are exempted from paying direct tax to the Union Government under Section 10(26) of the income tax. But it is a known fact almost everyone from officers to peon pay 24-25% of months’ salary to NNPGs.


Defending the imposition of tax, senior functionary of NNPGs said, we are only taking tax that is legally permitted, do not blame us for all the wrongs, making us a scapegoat for the failure of the system will not be in anyone benefit but admitted there was a need to streamline taxation system in Kiphire.


Due to the issue of excessive taxation over-all development has also taken a back-track, Toshika Yeptho Jio Point Manager Kiphire and a young entrepreneur said it is disappointing, whenever there is a proposal for setting up of new mobile towers comes up, we are always flooded with demand slip as a result of which companies are reluctant to come to Kiphire.


Another senior functionary of the NNC/FGN acknowledged that lack of transparency in tax system is an issue that has to be looked into by creating awareness rather than shifting the entire blame on NNPGs. He also alleged that government officials often under the guise of disturbance from NNPGs stay away from duty which is just an excuse and at time siphoned off funds meant for the development.


Market community said if at least 30% of yearly taxation is lowered, prices of essential commodities will drastically come down, which will directly benefit the economy of Kiphire.


According to the resolution adopted by the GBs & DBs Joint forum Kiphire District on 28th August 2018 to contain random vehicle entry taxation, shop tax and donations, the document mentioned that no form of taxation will be entertained within Kiphire jurisdiction. But it is difficult to be certain if the NNPGs will honour the resolution as the past resolutions has not yielded any significance change on the ground.