Black Tax and its Impact on Entrepreneurship Growth in Zambia: A Conceptual Perspective

Abstract

The purpose of this conceptual paper is to describe and contextualise the pervasive and yet under reported phenomenon, “Black Tax” and how it impacts entrepreneurship growth in Zambia. The author used extensive review of literature that encapsulates the key issues around Black Tax such as social norms and culture. The paper significantly contributes to the theoretical aspects as regards Black Tax. The paper argues that since Zambians are a highly collectivist society and consider themselves to be social actors as opposed to individualistic, they seek to share communal values over personal values. The paper posits that most entrepreneurs who hail from humble backgrounds feel obligated to help others mostly elderly or their siblings or children as a way of payback. Since traditionally it appears to be a taboo to express frugality to people that may have helped you in the past, entrepreneurs are left with no choice but to offer financial and or material support even when their businesses do not have capacity to lend such a hand. The paper posits that such culture, norms and traditions where Black Tax is normalised is partly responsible for SME under performance. The paper further posits that there is need for mindset change on the part of society generally and particularly those intending to venture into entrepreneurship as philanthropy and collectivism are at variance with entrepreneurship development.