The Abossey Okai Spare Parts Dealers Association is threatening to close and lock their shops on Monday if the government fails to reduce the 20% Value Added Tax (VAT) imposed on spare parts to around 5-8% by Friday.
In an exclusive interview with Takyi Addo, the Head of Communication at the Abossey Okai Spare Parts Dealers Association, urged the Ghana Revenue Authority (GRA) to opt for mass registration instead, stating it would help generate more revenue for the government.
According to him , the new tax regime which has been increased from four per cent to 20 per cent could collapse the businesses of its members and significantly increase the cost of spare parts to consumers.
He lamented that the 20 per cent VAT would severely affect the operations of spare parts dealers. Takyi explained that the tax increase would lead to sharp price hikes, making spare parts unaffordable for many consumers and adversely affecting the transport sector.
Stressing that the Association was concerned about the practical impact of the newly implemented VAT regime under the Value Added Tax Act, 2025 (Act 1151), particularly regarding fairness, competitiveness and voluntary compliance within the spare parts sector.
He noted that under the previous arrangement, dealers operated under a lower effective VAT framework, which allowed prices to remain relatively competitive while maintaining compliance.
The Association warned that the current VAT structure could lead to reduced compliance, discourage business expansion and shift customers towards non-VAT-charging sellers. It stressed that while it supported government’s efforts to broaden the tax base, the current VAT rate was excessively high for the spare parts trade.
Report by Bernard K Dadzie Greater Accra Region
