Black Tax When You’re An Entrepreneur

“Many people including myself have fear of leaving our jobs because of black tax,” Yonela Mgolombane, founder of Tunnel Solutions told the Daily Vox in an interview.

Mgolombane, a 30-year-old web design Company owner, similar to many South Africans juggles between her 9-5 job and her business. She says she would love to focus on her company full time for growth but the fear of unemployment while having to contribute to black tax and bills has kept her stuck on her job.

Black tax, a colloquial term used to define a phenomenon whereby a working professional has to split her earnings to support their immediate and sometimes extended families.

Asked if she has ever thought of quitting her job to focus on her business, she said: “Every day, there are so many opportunities in the industry that are worth more than one paycheck. It would give me more time to concentrate on growing my business and chasing those opportunities. I feel like a 9-5 job is not for everyone.”

Although Mgolombane contemplates about leaving her job, she says the reality of black tax and bills requires her to be realistic. She says she has more than three dependents to support with her paycheck.

“I have two unemployed brothers that I have to support, my parents, and my seven-year-old daughter. If I were to quit my job, they would all be left hanging, but I also need to make my business work because the paycheck is not enough to cover my needs and still be able to support my family,” she said.

Pearl Shusha (26) from Port Shepstone, South of KwaZulu-Natal recently quit her job as a banqueting manager at a local hotel in her area, to start her property and events business. She says her decision was thought through but the reaction from her acquaintances and colleagues made her question it.

“Fear of unemployment due to black tax has pushed many youngsters, who want to venture into business, to a corner where their dreams have to wait while they invest time into a 9-5 job for a paycheck,” Shusha said.

Shush says she has been contemplating leaving her job for quite some time, but her reality of bills and a family to support always made her reluctant of her decision. However, due to unhappiness and unfriendly environment, she eventually left her job, she says.

“After I had resigned I went through so much stress because of the negativity I received from people around me which pushed me into fear, fear of being unemployed and having bills to pay.”

“But despite all that, I just knew that I did the right thing because this is not something I slept and woke up thinking of doing. I had contemplated about resigning for some time because my business concept dates back to 2016 when I had a great idea of what I wanted to do. But, not having enough capital and having a family to take care of meant that I stick through to my job,” Shusha said.

Shusha adds that the reality if not having a paycheck by the end of the month has hit hard on her.

“When people started questioning me about my plan for my bills, it drained me because I started doubting my decision. I thought about my son who is at school and the bills to be paid monthly and my mother whom I support financially,” she said.

With South Africa’s severe income inequality, a report by World Bank shows that more than half population lives in poverty, and the middle class has particularly suffered from South African economy’s inability to create new employment.

A Statistics SA report titled ‘Youth unemployment still high in quarter 1:2018’ shows that the South African youth is still vulnerable to high rate of unemployment, although numbers may seem to have changed between 2017-2018. In the first quarter of 2018, youth unemployment was sitting at 38,2%, the report revealed.

In a country where youth unemployment is rife, young people are often at the receiving end of the competition within their respective fields of work. The income gap has encouraged the youth to look into other alternatives, such as entrepreneurship, however, lack of funding remains a great challenge. During the African National Congress (ANC) Manifesto, President Cyril Ramaphosa announced that 275,000 new jobs were to be created and delivered by the Presidential Jobs Summit.

Mgolombane, whose company offers all IT services and currently has two interns says although she has contemplated leaving her job for her business, the reality of black tax and bills requires her to be realistic.

“Business has its ups and downs, so you can not guarantee how much you will make, especially when you are still starting out. It means that if you have responsibilities waiting for you and you have to support people back home, it becomes really hard to just quit your job and pursue business,” Mgolombane said.

Meanwhile walking away from a job might seem as a hard decision, Smoothie Addict founder Nompakamo Dzanibe (25) believes that everything is worth taking a risk. Dzanibe took the risk in 2018 and walked away from her job, three months after starting her business.

“I have quit my job but I then realised it was a great mistake. It was a rash decision that wasn’t thought through. The business started straining because 50% of the profit ended up going to my personal needs instead of growing the business,” she said.

Dzanibe says she’s faced a great deal of challenges due to lack of capital, and has encouraged people to do research before quitting their jobs on a quest to venture into business.

Featured image by Ra’eesa Pather.