Abossey Okai Spare Parts Dealers Threaten One-Week Strike Over New VAT
The Abossey Okai Spare Parts Dealers Association has threatened to embark on a one-week strike if the government fails to urgently review the newly introduced Value Added Tax (VAT) regime under the Value Added Tax Act, 2025 (Act 1151).
In a press statement issued on Saturday, February 8, 2026, and signed by the Association’s Head of Communications, Takyi Addo, the group expressed strong concern over the 20 percent VAT rate now imposed on spare parts, warning that it is negatively affecting prices, competitiveness and tax compliance within the industry.
According to the Association, spare parts previously attracted a VAT rate of four percent, which helped keep prices relatively affordable for consumers. Under the new regime, however, an item that previously sold for GH¢500 with GH¢20 VAT now attracts GH¢100 in tax, pushing the final price to GH¢600. The Association says this amounts to an additional GH¢80 burden on consumers for the same product.
The group also raised concerns about what it described as unequal treatment among dealers. Under Act 1151, businesses 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, dealers below the threshold are able to sell the same spare parts at lower prices, even when they source from the same importers.
According to the Association, this disparity discourages business growth and compliance, while inadvertently promoting informality within the sector. It added that dealers who source spare parts locally but are unable to claim input VAT are forced to sell at higher prices, placing them at a competitive disadvantage compared to non-registered sellers.
While acknowledging the government’s efforts to broaden the tax base and improve domestic revenue mobilisation, the Association proposed alternative measures. These include reducing the VAT rate on spare parts to between five and eight percent, or introducing a simplified, sector-specific VAT scheme with a flat rate of three percent applied uniformly to both imported and locally sourced goods.
The Association said such reforms would help restore price competitiveness, encourage voluntary tax compliance, protect formal businesses and reduce revenue losses arising from tax evasion and informality.
It urged government to urgently review the VAT structure affecting the spare parts industry, stressing that compliant and growing businesses should not be penalised under the current system. The group also said it remains open to dialogue with government to arrive at a fair and sustainable solution.
