The Abossey Okai Spare Parts Dealers Association has threatened to embark on a one-week strike in protest against the newly introduced Value Added Tax (VAT) regime under the Value Added Tax Act, 2025 (Act 1151).
In a press release dated February 8, 2026, and signed by the Association’s Head of Communications, Takyi Addo, the group raised concerns about the new 20 percent VAT rate, stating that it is negatively affecting prices, competitiveness, and compliance within the spare parts sector.
According to the Association, spare parts previously attracted a VAT rate of 4 percent, which helped keep prices relatively affordable for customers. Under the new regime, an item that previously sold for GH¢500 with GH¢20 VAT now attracts GH¢100 in tax, increasing the total cost to GH¢600. This represents an additional GH¢80 burden on consumers for the same product.
The dealers also highlighted disparities between businesses based on their VAT registration status. Dealers with an annual turnover exceeding GH¢750,000 are required to register for VAT and charge the full 20 percent at the point of sale. However, smaller dealers below that threshold are able to sell at lower prices, despite purchasing from the same importers.
The Association argues that this situation creates an uneven playing field and disadvantages larger, compliant businesses. It believes that revising the VAT structure for the spare parts sector would help restore fair competition, encourage voluntary tax compliance, protect formal businesses, and improve revenue mobilisation by reducing leakages in the informal market.
The Association is therefore calling on the government to urgently review the VAT rate and its application to the spare parts industry, insisting that businesses that comply with tax regulations should not be placed at a disadvantage.
