Of black tax, diaspora remittances and WorldRemit!

The urban dictionary defines black tax as ‘the extra money that professionals are expected to give every month to support their less fortunate family and extended families’. I would think it is called a tax because it is an obligation just like what is paid to the tax man albeit the obligation is not legal. Coming from an accounting background, I would liken it to a constructive obligation which is an obligation that arises from an established or published practice of a party which creates valid expectations on other parties that it will discharge the obligation. In this case, where a member of a family starts earning income, this creates an expectation that he/she should take care of the parents, siblings, or extended family. I deliberately say when one states earning income because you do not need to be wealthy to ‘pay’ black tax. Consequently, black tax ranks high up the monthly budget and can take precedence over other equally important things.

In as much as there are parents who are or have created wealth for their children, many African families still find themselves under the bondage of generational poverty. As a result, it is a reasonable expectation that having sacrificed to take a child through school (which is seen as an investment), the child will pay back through taking care of the parents or taking one’s siblings through school when they start making an income. Many have written about black tax and I am not going to make any further points for or against it. For me, it is what is it!

The Zimbabwean context

Due to the economic meltdown that Zimbabwe has been going through for the past 2 decades, many people have left the country in search of greener pastures. Millions of Zimbabweans are estimated to be in the diaspora. The moment one is in the diaspora, an expectation is created that you are in a better place financially (unfortunately this is not always the case) and therefore people tend to look up to you when it comes to financial matters.

Hyperinflation happened in 2008 and wiped out people’s savings and pensions. There is a saying that once beaten twice shy but unfortunately this does not always hold true. People’s savings and pensions where once gain wiped out when the Zimbabwean dollar was reintroduced by the Zimbabwean government in June 2019. What then happened is that our parents who had worked all their lives and saved up for retirement or were contributing pensions were left with nothing. An example closer home is that of my mother who never got her pension though she had contributed all her working life. It is therefore fair enough to expect that parents will look up to their children to take care of them although this would not have been the case had the economy was operating normally.

This, and probably other reasons has seen diaspora remittances being one of the top sources of foreign currency for the country. In 2019, the country received US$635 million compared to US$619 million in 2018 which is a 2.6% increase per the Reserve Bank of Zimbabwe (RBZ) reports. It is even more interesting to note that diaspora remittances increased by 33 percent to US$466.2 million for the six months to July 31, 2020, compared to US$349.7 million during the same period in 2019 as per the RBZ figures. It is interesting because this was during the COVID-19 period and one would have expected the remittances to drop. This could be interpreted to mean that the financial obligations to support people in Zimbabwe increased during this time.

My experience with remitting money to Zimbabwe

I was ‘paying’ black tax when I was in Zimbabwe and continued to do so when I moved to the diaspora. When I moved to Namibia, the monthly process of remitting money to Zimbabwe was a nightmare. This was due to the queues that one had to endure, the punitive exchange rates and the fact that one had to always have copies of the contract of employment, current month’s pay slip and the identification document of the person you were sending money to. This was despite the fact that the money I was sending was below the threshold that required one to present such documents (I will not disclose the money transfer agent I was using). As a result, I hated this process but there did not seem to be any other better options.

Enter WorldRemit Money Transfer

When I moved to Ireland, I was pleasantly surprised that remitting money can be that easy and seamless. When the time came to dutifully pay my ‘tax’, I asked around and I was introduced to World Remit. I gave it a try and fell in love with it and here is why:

· To send money, you just need to install the WorldRemit app and you are good to go

· They offer good exchange rates

· Their fees are competitive

· You can transfer money from +50 countries to +150 countries

· Most of the transactions are authorised within minutes i.e. you can send money and one is able to pick it up within minutes

· The receiver gets a notification when money is sent and when they collect, the sender also gets a notification.

· When you sign up with WorldRemit, the first 3 transfers are fee free and you have to use the code 3FREE (promotion is valid until 30 November 2020)

· In Zimbabwe, there are many cash pick up points that include CBZ, NMB, ZB Bank, Steward Bank, POSB and GetBucks among others. You are therefore assured that there is a cash pick up point in almost every town.

…..And it gets better – Refer a friend

For every friend that signs up with your unique referral code and sends the specified minimum amount within six months, WorldRemit will send both you and your friend a reward voucher of €25 (you can check their website for the minimum send and voucher values by country). Once you send your first transaction, you will receive your unique referral code within 10 days, and you can refer as many people as you like using this code. When one of the friends you have shared your referral code with decides to sign up for a WorldRemit account, you should make sure they add your referral code in the referral code field on the sign-up form. Once they send the minimum send amount, WorldRemit will email both of you Refer a Friend vouchers within 10 working days. You can use your voucher with any future transaction (dependent on a minimum send amount) over the next twelve months or they will expire.

Would you like to give WorldRemit a try? If you are currently receiving money using another money transfer service, you too can advise the sender about WorldRemit. When using WorldRemit for the first time, you can use my unique code LLOYDM242 after which you can also start referring your friends and start saving!

For more information about WorldRemit, please visit their website on https://www.worldremit.com/