The Abossey Okai Spare Parts Dealers Association has issued a warning of a possible one-week strike if the government fails to urgently review the newly implemented Value Added Tax (VAT) regime under the Value Added Tax Act, 2025 (Act 1151).
In a press statement dated February 8, 2026, and signed by its Head of Communications, Takyi Addo, the Association said the current 20 per cent VAT rate is severely affecting pricing, competitiveness, and tax compliance within the spare parts industry.
According to the Association, the new tax structure is placing significant strain on operations and could push more businesses into the informal sector if left unaddressed.
Under the previous tax arrangement, spare parts were subject to a 4 per cent VAT rate, which helped dealers maintain relatively stable prices.
However, the revised regime has resulted in sharp price increases. The Association cited an example where an item previously sold for GH¢500 with GH¢20 VAT now attracts GH¢100 in tax, raising the final price to GH¢600.
“This represents an additional GH¢80 burden on consumers for the same product, at a time when many Ghanaians are already grappling with the high cost of living,” the statement said.
The Association also raised concerns over what it described as unequal treatment under the new VAT system. Businesses with annual turnover exceeding GH¢750,000 are required to register for VAT and charge the full 20 per cent at the point of sale, while smaller operators often sourcing from the same importers are able to sell at lower prices.
“This imbalance penalises growth, efficiency, and compliance, while unintentionally rewarding fragmentation and informality,” the statement noted.
Additionally, the dealers complained that some members are unable to claim input VAT on locally sourced products, forcing them to sell at higher prices and placing them at a competitive disadvantage.
While reaffirming their support for government efforts to broaden the tax base and enhance revenue mobilisation, the Association proposed alternative measures to ease the burden on the sector. These include reducing the VAT rate on spare parts to between 5 and 8 per cent, or introducing a simplified, sector-specific flat rate of 3 per cent.
