Tax and extortion: Illegal appropriation vexing business (Part-1)

Eastern Mirror Desk
Dimapur, Nov. 20: Members of the Naga public raising their voices on one side and business people on the other, the topic about tax and extortion still haunts every citizen in Dimapur. Being a commercial hub, Dimapur is every entrepreneur’s destination to establish their dreams in the economy. But they are prevented from doing so by extortion and illegal appropriation.

Two major rallies have been conducted against such illegal practices: the Against Corruption and Unabated Taxation rally on Oct. 31 2017, and the recent ‘illegal taxation rally,’ on Oct. 31 2018.

In an attempt to understand the condition and reveal the undercurrents behind tax and extortion in some of the well-known establishments in Dimapur, Eastern Mirror conducted a weeklong survey among owners and managers of some of the leading businesses in the town namely hotels, restaurants, bakeries, confectionaries, fruit and vegetable vendors, electronic shops, ration shops, and hardware shops.

As a matter of fact, it was realised that the activities of illegal appropriation still exists. The tax levied by legal departments and some associations including the municipal council have not been included as the persons who were interviewed said they had no issues regarding it.

According to every persons interviewed, the extortionists demand an annual tax which starts after the month of March.

Hotels and restaurants

Hotels and restaurants are establishments in Dimapur where business still flourishes in spite of a poor economy. This makes them vulnerable to extortion. However, it was informed that matters relating to tax and extortion were being handled by an association by the name Nagaland Hotel and Restaurant Association (NHRA).

The NHRA consists of 47 hoteliers and restaurateurs including a few bakeries and confectionaries. It was established with a purpose to act as a channel between the Tourism department and the hospitality business, especially during important occasion like the Hornbill Festival. It also participates in social activities and provides funds and charities for the less privileged.

Unfortunately, the association was forced to also become a shelter for some of the victims of extortion. When criminals demand money from a particular shop, hotel, restaurants etc., they are sent back to the association’s office where the owners decide and contribute to clear the ransom.

“Hotels are the main target for the extortionists. Every now and then, the miscreants demand money from some of the well-known hotels,” said a member of the NHRA during an interview by Eastern Mirror.

Surprisingly, it was informed that they have come to extort money last week, which was after the Oct. 31 rally. “When it comes to money, they never show their back, not even for a rupee,” asserted the member and said that there are four groups namely, NSCN (IM), NSCN (K), NSCN (U), and NSCN (R), that levy between INR 1,00, 000 and 3, 0,000 annually, which is between INR 4,00,000 to 12,00,000 in total.

The rest, FGN, NNC (Accordist), and NNC (Non-Accordist), levy money ranging from INR 30,000 to 50,000, which is INR 90,000 to 1,50,000.

“They (miscreants) even charge registration fees between INR 1000 to 2000 from every restaurants and work permit tax about INR 250 and 300 from each employee, especially non-local employee,” the member revealed.

The member also reported that ‘every year, some of the groups demand money before festive seasons like Christmas and New Year saying that they need money.’ “Some group does not even let us enjoy the festive seasons; instead they keep demanding money even during these seasons,” the member added.

“We do negotiate and pay a lesser tax. Our association can give to a single faction or two but we find it very difficult to pay the entire groups. If we pay tax to one, the other group come and say, ‘If you can give them, why not us?’” said the member.

Meanwhile, the member said that the association does not entertain individuals or groups who demand money beside the annual tax, but at a cost, which is, they get receive ‘unnecessary harassment’ from the miscreants saying that they will conduct inspection in the hotels.

The miscreants were reported to take the matters into their own hand. They go for drug and alcohol inspection. They also inspect if the hotels are being managed properly. “They even seize phones from the culprits (customers) and demand money between INR 20, 000 to 50, 000,” said the member while adding that the customers feel threatened, whereby, they decide not to book rooms in the future, which result in a huge loss of business.

“Last week, one person came and demanded money from us. I mentioned about the rally that was conducted on Oct. 31 about illegal taxation. One of the miscreants replied ‘We are aware of that, but we need still some amount of money so we cannot help it,’” said the member.

“Some are very aggressive and we cannot fight them back individually. They argue that we have created this association to cover-up from such taxation. They cannot be convinced when it comes to money,” said the member.

“They say, ‘we are your freedom fighter, why wouldn’t you pay us for our deeds?”’ the member added.

Bakeries

This newspaper also surveyed some of the well-known bakeries. One of the managers told this reporter that the NSCN (IM) charges 1,50,000 to 2,00,000 annually. NSCN (K) charges at similar rate but sometimes charge as high as INR 3,00,000, it was informed. On being asked why the groups charge such amounts, the person replied, “It has become a regular deed. They give no services in return. Instead, we still pay it.”

It was reported that there were also some groups consisting of three, mostly two, people who charge about INR 1000–3000. “These groups comes almost regularly, we try our best from our side to threaten them away,” said the manager.

“They come, saying that they have no money for fuel. Some of them come with medical prescription and bills saying that they need money to pay off the money,” said the manager.

The manager said that most of the non-Naga owners are scared of being threatened by the miscreants so they never disclose among themselves, and feared that they might still do it in the worst way possible.

There are also some group who comes with a purpose to check expired goods. The manager said that the miscreants demand about INR 1000 to 1500 for such service. She also said that the UGs forcefully charge the money from some of the non-Nagas even if they do not check the goods.

It was also informed that recently, few weeks before the recent Oct. 31 ‘illegal taxation rally’ in Dimapur, one of the factions gave a requisition letter to some of the shops stating that they are facing a financial crisis and needed money for the festive season.

Another owner said that he experienced a lot of extortion from every faction in the past. He named NSCN (IM), NSCN (K), NSCN (U), NSCN (R), FGN, NNC (Accordist), and NNC (Non-Accordist).

The owner said that he is still facing similar activity but added that the amount they impose has reduced a bit as he had run low on his business. “Some factions appear lenient as they understand if I share about the financial problem which my bakery faces. They initially charge INR 10,000 but after negotiation they end up charging INR 5000,” he explained.

The owner also said that he had faced some miscreants consisting of two or three persons, claiming to be members of one of the factions. They were reported to demand money ranging from INR 500-1000. “We force them to go away. Some does not go, instead they start harassing indirectly saying ‘we will soon see about that,’” said the owner and continued, “I know what they meant by saying that; they will surely do something bad like they usually do, so I resort to negotiate on the spot to prevent such things to happen. They go away after they get the money they ask.”

“Though my bakery store looks big, it does not have any much item like the leading bakeries do. I do not earn much out of it but I fear that they (miscreants) charge money in proportion to the size of the shop,” he considered.

Another manager who does not wished to divulge any information about extortion said, “There is nothing we can do about illegal tax collection. This is Dimapur, tax is everywhere. If any business people say he is not being taxed, then he is lying.”

Now NNPG extort from church

The underground groups are now extending their ‘taxation’ tentacles to churches. The Dimapur Area Ao Baptist Pastors Fellowship (DAAPBF) issued a statement on Tuesday expressing disgust and outrage that the ‘Naga national political groups’ were even ‘taxing’ the churches now.

‘The DAAPBF is aghast and pained to know that our Naga National Political Groups (NNPGs) are collecting taxes even from church building constructions,’ the pastors stated.

“It is to be mentioned here that the Aoyim Baptist Church has started its new church building construction with a dedicatory service on 9th October, 2017. Soon after the construction started, different NNPGs has been levying taxes on the non-local skilled workers/labors which ultimately adds up to the total cost of the church building,” the statement read.

“The church members have painstakingly collected offerings and tithes for several years to construct the new church building. On the lookout, non-local workers are hired to do the construction works due to non-availability of local workers from whom the taxes are imposed.”

After ascertaining the ‘unwarranted information,’ the pastors said to have called an emergency meeting during which they discussed the serious issue. The pastors have declared this statement: ‘The DAABPF is convicted that such taxes even from the construction of the house of God is against Christian testimony and biblical teaching. Therefore, such practices are detestable and should be refrained.’

For the remaining parts please follow the link below:-

Part 2-Tax and extortion: Shopkeepers live in fear
Part 3-Tax and extortion: Why traders form groups
Part 4-Tax and extortion: Role of the negotiator