The Abossey Okai Spare Parts Dealers Association has warned it may embark on a one-week strike if the government does not urgently review the newly introduced 20 % Value Added Tax (VAT) regime, saying the policy is harming pricing, competitiveness and compliance in Ghana’s largest automotive spare parts market.
In a press statement dated February 8, 2026, and signed by the Association’s Head of Communications, Takyi Addo, the group said the VAT rate increase under the Value Added Tax Act, 2025 (Act 1151) has significantly raised costs for dealers and consumers alike. Under the previous system, spare parts attracted an effective VAT rate of around 4 %, but the new regime now imposes 20 %, sharply pushing up retail prices and placing formal, tax-registered traders at a disadvantage compared with smaller, informal sellers who are not required to charge VAT.
The Association says the increased tax burden has led to an estimated 15 % decline in sales for some dealers, undermining livelihoods and encouraging customers to shift purchases to non-compliant outlets. This not only impacts legitimate businesses but also risks reducing overall revenue mobilisation, as consumers and traders gravitate toward informal transactions that evade tax.
“Our current VAT structure discourages growth, hurts competitiveness and unintentionally rewards informality,” the dealers’ statement said, calling for an immediate government review. They are proposing alternative measures, such as lowering the VAT rate on spare parts to between 5 % and 8 % or introducing a simplified, sector-specific VAT scheme at a flat lower rate, to restore price competitiveness and encourage voluntary compliance.
The Association’s warning of possible strike action highlights broader concern within the sector about the sustainability of formal, compliant businesses under the higher tax regime, especially at a time when many Ghanaians are facing high living costs and inflationary pressures.
Government responses to these demands have not yet been issued publicly, and negotiations between the Ghana Revenue Authority (GRA) and the Abossey Okai Spare Parts Dealers Association are expected as stakeholders seek a practical, balanced solution.
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