The Abossey Okai Spare Parts Dealers Association has warned 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 hurting pricing, competitiveness, and compliance within the spare parts sector.

“The new VAT rate is significantly affecting our operations and making it difficult for dealers to remain competitive,” the statement said, adding that the policy risks pushing more businesses into informality.

Under the previous tax arrangement, spare parts attracted a VAT rate of 4 per cent, which allowed dealers to keep prices relatively stable. The Association explained that an item previously sold for GH¢500 with GH¢20 VAT now attracts GH¢100 in tax, pushing the final price to GH¢600.

According to the group, this translates into an additional GH¢80 burden on consumers for the same product, at a time when many Ghanaians are already struggling with the high cost of living.

The dealers also raised concerns about what they described as unequal treatment under the new regime. Businesses with annual turnover above GH¢750,000 are required to register for VAT and charge 20 per cent at the point of sale, while smaller operators can sell at lower prices despite sourcing from the same importers.

“This imbalance penalises growth, efficiency, and compliance, while unintentionally rewarding fragmentation and informality,” the statement noted.

The Association further complained that some dealers are unable to claim input VAT on locally sourced products, forcing them to sell at higher prices and putting them at a disadvantage compared to competitors.

While expressing support for the government’s efforts to widen the tax net and improve revenue mobilisation, the group 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 scheme at a flat rate of 3 per cent.

According to the Association, such reforms would help restore price competitiveness, encourage voluntary compliance, protect formal businesses, and reduce tax leakages.

The spare parts dealers stressed that compliant businesses should not be punished for operating within the law. “We respectfully request a review of the VAT rate and structure as applied to the spare parts sector and remain open to further engagement on this matter,” the statement said.