The Arakan Army (AA), an armed separatist group in Rakhine State, has announced the formation of a taxation agency in its occupied territories. The new “Rakhine Peoples’ Authority”, as it is called, will collect funds for its political and military operations in a move to establish itself as a political body.

The move came in stark contrast to the Arakan Army seizing a river ferry and taking 16 passengers, who were members of the Road Transport Administration Department, hostage on New Year’s Eve. Although hostages were released the following day, they were merely the latest of hundreds of hostages captured this year as the armed group has ramped up hostilities against the Myanmar military and civilian government.

Several of these hostages have been killed in the crossfire between the AA and the Myanmar Army (Tatmadaw). One recent casualty includes national MP U Ye Thein, who had been captured by the AA and died when a Tatmadaw artillery shell hit his holding cell. The AA says it seeks to detain only military personnel, not civilian hostages, and that the Myanmar military cares little for preventing collateral damage. But the Myanmar government claims the group uses hostages as human shields and has little regard for their safety.

The AA is a native Rakhine group that ostensibly seeks greater rights and autonomy for ethnic Arakan Buddhists. It is separate from the Arakan Rohingya Salvation Army, whose actions the government blames for the human rights crisis on the western border.