Spare parts dealers at Abossey Okai, the nation’s largest hub for vehicle components, have voiced their grievances over the crippling effect of exorbitant port charges and government neglect on their businesses. According to representatives from the Abossey Okai Spare Parts Dealers Association, the soaring import charges and cumbersome tax regime threaten the survival of the spare parts industry in Ghana.
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Mr. Takyi Addo, Head of Communications for the Association, highlighted the significant challenges faced by spare parts dealers, citing a drastic decline in the number of containers cleared at the ports due to the imposition of 23 taxes on imported goods. He lamented that while seven years ago, 32 containers could be cleared annually, the current situation sees clearance for a mere five containers, severely hampering the operations of spare parts dealers.
Central to the grievances of spare parts dealers is the issue of import charges, exacerbated by the lack of a clear and standardized taxation framework. The Association has advocated for either a fixed or flat rate at the ports to provide clarity and consistency in taxation. While the government has proposed a flat rate, the Association insists on a fixed rate, arguing that it would eliminate ambiguity and prevent arbitrary charges imposed by authorities.
In March, the leadership of the Abossey Okai Spare Parts Association expressed support for the implementation of a fixed rate for spare parts importation, citing its potential to curb corruption and ensure fairness in the importation process. They emphasized the need for a transparent and equitable taxation system to safeguard the interests of spare parts dealers and promote industry growth.
The lack of a local manufacturing plan for vehicle components further compounds the challenges faced by spare parts dealers. Mr. Addo underscored the government’s failure to incentivize local production of minor vehicle parts, resulting in increased reliance on imported spare parts and inflated prices. He called for government intervention to facilitate the establishment of local manufacturing plants in collaboration with industry stakeholders.
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Moreover, spare parts dealers decried the preferential treatment accorded to local assembling plants, which import fully assembled vehicles and enjoy tax exemptions, while spare parts dealers bear the brunt of heavy import duties and levies. They urged the government to level the playing field by abolishing unnecessary taxes and providing support for local spare parts manufacturing initiatives.
The imposition of taxes such as the COVID Levy and import substitution levy has further exacerbated the financial burden on spare parts dealers, impeding their ability to provide affordable vehicle components to motorists. Mr. Addo cautioned that sustained increases in spare parts prices would have ripple effects on transportation costs and living expenses, ultimately hindering economic growth.
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In light of these challenges, spare parts dealers at Abossey Okai are calling on the government to prioritize the interests of the spare parts industry, streamline taxation policies, and promote local manufacturing to ensure the sustainability and growth of the sector. They emphasize the need for collaborative efforts between the government and industry stakeholders to address the underlying issues and foster a conducive environment for the spare parts business in Ghana.