Black Tax: Blessing or Burden?

I do not like the term "Black Tax" but I appreciate that we view this topic differently. Let's go!

This is a very controversial topic, but let us: 

1. Appreciate the positives
2. Understand the negatives and 
3. Find a practical way forward.

As South Africans the spirit of Ubuntu lives within us. As the saying goes Umntu, ngu mntu ngabantu basically means that, we are who we are because of other people and this all would not make sense if a person does not start practising Ubuntu to the people that raised him or her.

An often unspoken but commonly held view, particularly in black families, is that those who are considered the more successful professionals or graduates will inevitably share that success with the less well-off members of the family which extends to both close and distant relatives. This expectation may not always be communicated initially or clearly but starts out as a small or negligible request for assistance with grocery money. This eventually grows into ever increasing substantial requests for financial assistance for school or varsity fees, transportation fees or maintenance costs and quickly snowballs into an ongoing list of never-ending demands. This is the popular phenomenon known as black tax.

The Blessing of Black Tax

Many African households are still struggling financially and have put their trust and hope on that or those children who are working to help them. Having a child is more like an "investment and just like  any investment, they expect a return in investment which they bank on that financial support when the child starts working.

The concept of financially assisting family is not a bad thing when the assistance is geared towards improving living standards, helping obtain qualifications and setting up a family for independence. Great and inspiring stories are often told of how children who grew up in impoverished families and communities went on to achieve success and then paid it forward by giving back to those communities that raised them. This often served as a launching pad for the successes and achievements of the next generation of graduates who in turn went on to pay it forward. That is the blessing of black tax.

The Burden of Black Tax

The controversial aspect of black tax comes in when that constant request for assistance is accompanied by a sense of entitlement, guilt-tripping, manipulation and what may come across as blatant disregard for the taxpayers own financial commitments. This is the selfishness and entitlement that is inherent within black tax.

An emerging trend within our society is that as opposed to needing money for constructive purposes, the demands made are often for vain reasons, where people want to live out their lavish fantasy lifestyles at the expense of someone else.

This is where black tax can spiral into a never-ending cycle of dependence with financial, emotional and relationship consequences. Very little consideration is given to the taxpayers own financial and personal obligations. This violation comes with serious repercussions and places immense pressure on the taxpayer. This is the burden of black tax.

Dependence: The chain of financial demands placed on the taxpayer may start at the very top with the parents but soon trickles down to siblings and cousins with no expiry date.

Financial: The inevitable consequences are that taxpayers often sacrifice their own dreams and aspirations to meet the demands and could spiral into debt in an effort not to let their families down. One need only look at the number of young professionals who are either blacklisted, in serious debt and struggling with repayments or even resorting to loan sharks just to keep up.

Emotional: The emotional turmoil that comes with not being able to meet expectations, letting family down and the blackmail that comes with the demands can take a toll on ones mental and emotional well-being.

Relationships: The hardest and saddest disadvantage to black tax is that it can lead to tensions in the family which can cause relations to be strained and eventually lead to the disintegration of the family unit.

Way forward

Financial education and the ability to understand how money works is the first step to ending black tax.  The art of investing and managing money, and the ability to make wise money decisions is the road to financial freedom. 

Know your responsibilities: Knowing your responsibilities can help you deal with black tax better as you will be aware of what you must do and avoid being burdened by many responsibilities.

Budget for black tax: Budgeting for black tax can help you manage your finances wisely and be able to help and support your family. It is sometimes impossible to avoid black tax, because of our family backgrounds.

Setting deadlines: Help your family understand that you wont always be there to support them. Instead help them start a business, take them to school, and also teach them about money so that are not dependent on your indefinitely 

Always pay yourself first: You deserve to spend and enjoy your hard-earned money, so before helping everyone, make sure you do not suffer at their expense. Save some money for yourself. You deserve it

Financial Education: Teaching them about money can open their eyes and make them see that making money is not as hard as many people think, it is easy and possible given focus, discipline, and patience. 

Black tax can be a thing of the past if we focus on building generational wealth. I believe our generation today knows better and will do better financially. Whether it is seen as a burden or a blessing, one thing is for sure, black tax needs to be openly and clearly communicated among family members.