Spare parts dealers at Abossey Okai are voicing strong concerns over Ghana’s new Value Added Tax (VAT) regime, claiming it distorts competition and could spark industrial action.
In a press statement released on February 2, 2026, the Abossey Okai Spare Parts Dealers Association highlighted how the Value Added Tax Act, 2025 (Act 1151) has jacked up the effective VAT on spare parts from 4% to 20%. This surge has driven up prices and eroded the sector’s competitiveness.
The association explained that spare parts were once affordable under the old system, with dealers meeting their tax duties. Now, an item that sold for 520 cedis (including VAT) costs 600 cedis a 80-cedi hit to consumers.
Dealers also decried unequal treatment in the market. Those sourcing locally from importers and surpassing the 750,000-cedi annual VAT registration threshold must charge VAT, while sub-threshold dealers get a pass. VAT-registered sellers can’t reclaim input VAT on these local goods, forcing them to price higher than rivals from the same suppliers.
This imbalance, they say, pushes customers toward non-VAT sellers, stifling growth, fueling informality, and eroding tax compliance.
While supporting the government’s push to broaden the tax base, the association called the current setup unsustainable amid razor-thin margins. They urged a review, suggesting a sector-specific VAT rate of 5-8% or a flat 3% simplified scheme.
The group remains open to talks with authorities but warned of a one-week strike if concerns go unaddressed.
Story by : Mercy Addai Turkson # ahotorfmonline.com