Chamwe Kaira
Namibia Revenue Agency (NamRA) has engaged stakeholders on how transactions involving the sale or transfer of mineral and petroleum licences should be taxed and regulated.
The discussions come as Namibia sees increased activity in the oil sector following discoveries in the Orange Basin.
NamRA commissioner Sam Shivute said the current legal framework still applies to these transactions.
He said concerns raised during the engagement will be reviewed and submitted to the Ministry of Finance and Public Enterprises.
The Chamber of Mines of Namibia said tax on share sales linked to licences should be based on profits.
Chamber of Mines of Namibia chief executive officer Veston Malango said taxing the full value of transactions could discourage investment.
He said this is important during early exploration stages where projects carry risk and limited income.
He also proposed the introduction of a capital gains tax system to support revenue while encouraging investment.
Malango said tax rules for exploration and mining licences should align with those for petroleum licences.
According to Deloitte Namibia, the initial goal of taxing these transactions was to reduce speculative activity.
The firm said it is often difficult to separate capital and revenue transactions in such deals.
It noted that sale prices often include other assets such as equipment and stock.
Deloitte said only the portion linked to the licence should be taxed.
It also raised questions on how to value exploration assets where there are no proven reserves.
The firm said similar issues arise when a business is sold as a whole, where the value of the licence must be separated from other assets.
The Namibian Competition Commission (NaCC) said licence transfers may fall under merger rules.
Senior legal analyst Leena Shikongo said transactions must be reported if they meet set financial thresholds.
She said the aim is to protect competition, support small businesses and prevent market dominance.
NamRA is considering new measures to improve oversight.
These include mandatory reporting of licence transactions and closer coordination with regulators.
Companies may also be required to submit transaction documents such as agreements and valuation reports after approval.
