Spare parts dealers at Abossey Okai have threatened to embark on an industrial action if the Ghana Revenue Authority (GRA) fails to withdraw the recently increased Value Added Tax (VAT) rate, which has pushed the effective tax on taxable supplies to 20 per cent.
In a press statement dated February 8, 2026, the Abossey Okai Spare Parts Dealers Association expressed deep concern over the new VAT regime, describing it as disruptive and harmful to the operations and sustainability of businesses within the enclave.
According to the Association, VAT-registered dealers have recorded an average decline in sales of about 15 per cent since the implementation of the tax increase. The group noted that the downturn has negatively affected livelihoods, weakened compliance, and driven many customers to patronise informal and non-compliant sellers.
“This sharp drop has negatively affected livelihoods, reduced compliance, and forced many customers to shift purchases to informal and non-compliant sellers,” the statement said, warning that the situation ultimately undermines government revenue mobilisation rather than improving it.
The Association argued that the current VAT structure has created unfair market conditions, placing compliant businesses at a disadvantage while informal operators who do not charge VAT continue to gain market share.
“This situation threatens the sustainability of legitimate enterprises within the Abossey Okai trading enclave and beyond,” the dealers cautioned.
The group has therefore called on the GRA to urgently withdraw the 20 per cent VAT rate and initiate discussions with key stakeholders to develop what it described as a more practical and business-friendly taxation framework.
As an alternative, the Association proposed the introduction of a simplified VAT scheme tailored specifically to the spare parts sector. It believes such a system could improve compliance, reduce tax evasion, broaden the tax net, and increase revenue collection by at least 10 per cent through greater formalisation.
The dealers are also advocating a reduced VAT rate of between 5 and 8 per cent, which they say would align Ghana’s tax regime with those of regional competitors and enhance the competitiveness of local spare parts businesses.
“If the GRA fails to address these concerns and initiate constructive dialogue, the Association will have no option but to embark on a one-week industrial action to protect the interests of our members and the sustainability of the sector,” the statement warned.
Despite the threat of industrial action, the Association stressed that it remains open to engagement and committed to working collaboratively with government to strike a balance between revenue generation, business growth, and job protection.
The statement was signed by the Association’s Head of Communications, Takyi Addo.
