Cowrywise Names Black Tax and Shows Its Impact on Nigerian Incomes
Cowrywise's new report names and measures the informal financial support many Nigerians give to family—a practice it calls Black Tax. The report defines Black Tax as regular or occasional money given to parents, siblings, relatives or community members simply because the earner is seen as having made it. It introduces a simple ratio: Black Tax Ratio = (Monthly Family Support ÷ Monthly Income) × 100. For example, someone earning ₦600,000 who sends ₦170,000 to family has a 28% ratio, falling into the heavy family responsibility band (25‑40%). The report classifies ratios: 0‑10% light support, 10‑25% manageable but should be budgeted, 25‑40% heavy responsibility, 40‑60% financially stressful, and over 60% potentially unsustainable without extra income. Real‑world cases show the burden varies with income structure: a senior IT manager earning ₦900,000 sends about ₦340,000 (38%); a business owner making ₦10 million supports relatives with ₦920,000 (9.2%); a finance professional on ₦800,000 covers ₦500,000 in family requests (62.5%). Over time, even modest amounts add up—₦50,000 a month totals ₦3 million in five years. The report urges setting a fixed monthly support amount, building emergency funds and investments alongside family help, and discussing obligations openly before major commitments. What's your Black Tax Ratio, and how would a fixed support amount change your ability to save or invest?