Spare parts dealers at Abossey Okai have raised concerns about Ghana’s new Value Added Tax regime, warning that it is distorting competition and could trigger industrial action.
In a press statement issued on 2 February 2026, the Abossey Okai Spare Parts Dealers Association said the Value Added Tax Act, 2025 (Act 1151), has increased the effective VAT charge on spare parts from four percent to 20 percent, significantly raising prices and weakening competitiveness in the sector.
The Association said that under the previous system, spare parts remained relatively affordable while dealers largely complied with tax obligations. Under the current regime, however, an item that previously sold for 520 cedis, including VAT, now sells for 600 cedis, placing an additional burden of 80 cedis on consumers.
The group also raised concerns about what it described as unequal treatment among dealers operating in the same market. According to the Association, dealers who source goods locally from importers but exceed the annual VAT registration threshold of 750,000 cedis are required to charge VAT, while those below the threshold are exempt.
The spare parts dealers said this creates a competitive imbalance, as VAT-registered dealers are unable to claim input VAT on locally sourced goods, forcing them to sell at higher prices than non-registered dealers sourcing from the same suppliers.
The Association warned that the situation is encouraging customers to patronise non-VAT-charging sellers, discouraging business expansion and increasing incentives for informality, ultimately undermining tax compliance within the sector.
While backing government efforts to widen the tax base, the Association said the current VAT structure is unsustainable for spare parts dealers due to thin profit margins.
The group is calling on government to review the policy, proposing either a reduced VAT rate of between five and eight percent for the sector, or the introduction of a simplified, sector-specific VAT scheme at a flat rate of about three percent.
The Abossey Okai Spare Parts Dealers Association noted in the press statement that it remains open to further engagement with authorities, warning that failure to address the concerns could lead to a one-week strike.
