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Impact of Service Quality on Taxpayers' Satisfaction at Revenue District Office

21A, Bureau of Internal Revenue, Pampanga, Philippines

Article · February 2021

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PREO Journal of Business and Management ISSN: 2619-6824
Vol. 2, Issue 1, February 2021

Impact of Service Quality on Taxpayers’ Satisfaction at Revenue District

Office 21A, Bureau of Internal Revenue, Pampanga, Philippines
Arjay H. Asuncion (Corresponding author)
Our Lady of Fatima University – Graduate School (Pampanga Campus)
City of San Fernando, Pampanga, Philippines
asuncion_arjay@yahoo.com

Jean Paolo G. Lacap

Our Lady of Fatima University – Graduate School (Pampanga Campus)
City of San Fernando, Pampanga, Philippines
jpglacap@gmail.com

Abstract

The study investigates the impact of service quality of Bureau of Internal Revenue office on
satisfaction of taxpayers. The respondents included taxpayers in Revenue District Office 21A
and they were selected using purposive sampling technique. Using descriptive-correlational
research design nonparametric tests (Spearman’s rho, Kruskal-Wallis, and Mann-Whitney U
tests) and linear regression, the results revealed that service quality dimensions – tangibility,
reliability, responsiveness, assurance, empathy – are significantly and positively related to
taxpayers’ satisfaction. It was also found that reliability, responsiveness, assurance, and
empathy predict satisfaction of taxpayers. Test of significant difference was also performed,
and the findings showed that no significant differences were found on taxpayers’ satisfaction
when respondents were grouped based on demographic characteristics.

Keywords: service quality, satisfaction, tangibility reliability, responsiveness, assurance, empathy

1. Introduction

With the level of competition in the current market, the quality of service delivered to
customers by enterprises plays a significant impact on organizations’ competitiveness and
sustainability. When customers believe that they receive quality service, the possibility of repeat
purchase is plausible. On the other hand, when customers experienced bad service, patronizing
the enterprise’s products and services is improbable (Sherman, 2019). Without customers,
organizations will cease to exist, therefore, delivery quality service is vital (Lovering, 2019).

Providing quality customer service starts within the organization. Culture acts as an important
tool in shaping people on how to deliver excellent service to clients. When employees
understand the importance of serving customers right, it is much easier for the organization
to connect with the clientele (Lovering, 2019). Several studies have identified that the quality
of customer service affects the image and reputation of an organization (Mmutle & Shonhe,
2017). When service quality is high, the level of customer satisfaction tends to be high, too,

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and this significant and positive relationship is indirectly affected by corporate image (Chien
& Chi, 2019).

Service quality is vital among private organizations and quality customer service is the central
element of the public sector. In the government sector, public service is the fundamental task
of every government workers and the citizens are the ultimate customers. All government
units and agencies must guarantee quality customer service among their clientele (Hadiyati,
2014). The quality of customer service is gauged by the citizens, businesses, and private
individuals; hence, government workers are expected to deliver the service that the customers
deserve (Zamil & Shammot, 2011). When citizens experience poor physical facilities,
unaccommodating employees, long queues, and the like, the image of the public sector
organization is affected (Nor, Khalid, Razali, & Ramli, 2010).

In the Philippines, there are several initiatives aimed at augmenting national competitiveness
through public sector productivity programs. These programs concentrate on service quality,
performance management, e-government, and innovation leadership. Service quality initiative
is designed at attaining excellence in service through sustainable and increasing improvements
in the level of public services in all aspects of Philippine government (Development Academy
of the Philippines, 2017). Reforms have been in place in various agencies and government
units. For instance, the Department of Finance is crafting ways to improve the level of
satisfaction of taxpayers at the Bureau of Internal Revenue (Department of Finance, 2017).

The vision of Bureau of Internal Revenue (BIR) is to be an institution of service, excellence

and integrity (BIR, 2019) by implementing mechanism to improve its services. Recently, BIR
partnered with Union Bank of the Philippines (UBP) and came up with the online tax payment
system through web and mobile applications. This initiative is aimed to ease the payment of
taxes, improve the compliance of the taxpayers, and augment client satisfaction (Ramirez,
2019). The Bureau, being a government unit, is expected to collect taxes through just
enforcement of tax laws for nation-building to uplift the lives of every Filipinos (BIR, 2019)
by excellence in delivery service among taxpayers. Therefore, the present study aims to study
how service quality affects the level of satisfaction of taxpayers. In particular, the current
undertaking assesses how service quality dimensions – assurance, reliability, responsiveness,
tangibility, and empathy – influence taxpayers’ satisfaction. It further investigates if there are
significant differences in the satisfaction of taxpayers when they are grouped based on
demographic factors.

2. Research Framework and Hypothesis Development

The success of any organization depends on various factors and quality service is the most
important. It has been noted that service quality directly impacts customer satisfaction and
customer perceived value is equated with customer satisfaction. Thus, when customers are
satisfied, repeat purchase may occur (Lai, Chu, & Petrick, 2011). Moreover, quality service and
customer satisfaction were recognized as antecedents of service switching. Particularly, service
quality is established to be a determinant of customer satisfaction and service quality can
impact intentions to switch (Bansal & Taylor, 2015). In some cases, customer satisfaction

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increases the tendency of customers to be loyal when service quality is present (Orel & Kara,
2014).

2.1 Service Quality

There are several factors that are associated with service quality. These include customer
satisfaction, customer contentment, and customer loyalty. According to Gong and Yi (2017),
happiness of the customer is determined by quality of service. Their study further revealed
that customer satisfaction is a factor of service quality. Therefore, when service quality is
provided well, it triggers positive outcome that benefits customers.

In most literature, service quality is described in relation to identifying the gap between the
perception and expectation of the customer (Ntabathia, 2013). Because of its distinctiveness,
there is no single definition of what service quality is. This gives rise to various service quality
models, which include SERVQUAL and SERVPERF scales.

The SERVQUAL model was established by Parasuraman, Zeithaml, and Berry (1988) to
quantitatively measure service quality. Assurance, reliability, responsiveness, tangibles, and
empathy are the five (5) dimensions of service quality in the said model. Tangibles refer to
physical characteristics which include the equipment, facility, appearance of employees, and
others. On the other hand, reliability refers to the firm’s dependability, accuracy, and
fulfillment of the promised service. Moreover, responsiveness is how the enterprise helps and
offers quick service to its customers. Assurance is another service quality dimension which
talks about how to inspire trust and confidence to customers; it is measured in terms of the
employees’ courtesy and knowledge. The last dimension is empathy which refers to how the
firm fosters care and personalized attention to its clientele (Yarimoglu, 2014). The 7-point
Likert scale is used to measure all these dimensions.

Because of its popularity, SERVQUAL model has been widely used in various sectors. For
instance, the level of service quality, customer satisfaction, and customer loyalty in the banking
sector of Hong Kong was examined by the group of Lau, Cheung, Lam, and Chu (2013).
Using the SERVQUAL model, the results revealed that all five (5) dimensions are significantly
related to customer satisfaction. Among the dimensions, four (4) were recognized as strong
predictors of customer satisfaction. These are tangibility, responsiveness, reliability, and
assurance. Moreover, Ilyas, Nasir, Malik, Mirza, Munir, and Sajid (2013) measured the level of
expectations and perceptions of bank customers using SERVQUAL dimensions. The findings
indicated that, in terms of expectations, empathy, assurance, and responsiveness yielded high
scores. Regarding customer perceptions, reliability, responsiveness, and assurance produced
the highest perception scores. A similar study was also conducted by Çırpın and Sarıca (2014).
In their undertaking, service quality of Turkish banks was measured. The results magnified
that around 77% of bank customers’ expectations were met and responsiveness dimension
was the primary predictor of expectations. On the other hand, assurance was the weakest
predictor.

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Albarq (2013) examined how service quality of banks in Riyadh, Saudi Arabia impacts
customer loyalty. The results revealed that the manifestation of improved service quality
augments the loyalty of bank customers. It was also argued that empathy, assurance, and
reliability significantly predict customer loyalty. A similar study was also conceptualized by
Sulieman (2013) who scrutinized the effect of SERVQUAL dimensions on housing bank
customer satisfaction in Jordan. As expected, the findings showed that SERVQUAL
dimensions affect customer satisfaction. Ali and Raza (2017) likewise investigated service
quality-customer satisfaction link among Islamic banks in Pakistan. The findings indicated that
as the level of SERVQUAL dimensions increases, the level of customer satisfaction also
increases; therefore, there is a positive relationship between SERVQUAL dimensions and
customer satisfaction. Akbari and Darabi (2015) also produced identical study but the research
locale concerned Iranian banks. The results are also similar with previous studies indicating
that customer satisfaction increases due to SERVQUAL dimensions. Moreover, Marković,
Jelena, and Katušić (2015) also investigated the level of service quality of banks in Croatia.
Using t-tests, the findings showed that bank customers have elevated level of service quality
expectations. It further revealed that there is a negative gap between the perception and
expectations of the clients which signify dissatisfaction.

Majority of the studies on SERVQUAL was in the banking sector but there are also
researchers and scholars who explored the dimensions of SERVQUAL in education sector.
For example, Yousapronpaiboon (2014) examined the levels of responsiveness, assurance,
tangibles, empathy, and reliability in higher education. The results magnified that the level of
service quality expectations of Thai undergraduate students is higher than their perceptions
signifying negative SERVQUAL gaps. Additionally, Veerasamy, Noel, and Govender (2014)
explored the level of service quality of South African higher education institutions. The results
showed that negative gaps also exist in all SERVQUAL dimensions and empathy reflected the
highest gap. Also, Green (2014) identified the level of service quality in higher education using
SERVQUAL model. The results reflected that tangibles, reliability, and assurance showed high
customer expectations. In terms of customer perceptions, assurance was identified to have
high score. Same is true with the study of Reddy and Karim (2014) who identified
SERVQUAL dimensions as factors that contribute to the student satisfaction.

2.2 Customer Satisfaction

In the field of marketing, customer satisfaction is one of the most researched concepts.
Excellent customer service will always yield satisfaction from the customers. Attaining
customer satisfaction is the primary factor to achieve organizational goals and attain success
(Munusamy & Chelliah, 2011). More and more organizations are now realizing that keeping
the present customers is more sustainable that acquiring new ones (Boulter, 2010). Customer
satisfaction (or dissatisfaction) is the individual’s sensation of pleasure or displeasure which
comes from his or her comparison regarding a product’s performance against his or her
expectation (Kotler, Burton, Deans, Brown, & Armstrong, 2015). Furthermore, it was found
out that service quality dimensions are predictors of customer satisfaction (Izogo & Ogba,
2015).

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Various studies have identified the relationship of service quality and customer satisfaction.
For instance, Johnson and Karley (2018) investigated the impact of service quality on the level
of satisfaction of customers and the results revealed that assurance, empathy, and
responsiveness were the dimensions of service quality that affect customers’ satisfaction.
Furthermore, Ali and Raza (2017) examined how service quality affects customer satisfaction
of Islamic banks in Pakistan. The results indicated that, indeed, service quality is significantly
related to customer satisfaction. A similar study was also conducted by Van Quyet, Vinh, and
Chang (2015) and they found out that all five (5) dimensions of service quality positively affect
the level of satisfaction of bank clients in Vietnam.

Rahman, Othman, and Amrin (2018) examined the impact of electronic service quality on the
satisfaction of taxpayers. The findings disclosed responsiveness, ease of use, security/privacy,
and website design are the predictors of taxpayers’ satisfaction. Moreover, Baharon, Yap,
Ashar, Hanafi, and Hazmi (2017) investigated the factors affecting satisfaction of Malaysian
citizens in terms of e-government portals. The results showed that service quality, perceived
ease of use, and content quality are the primary predictors of citizen’s satisfaction. A similar
study was conducted in Vietnam by Nguyen (2019) who scrutinized the level of Vietnamese
satisfaction in terms of public services. The findings indicated that procedures, service fee, and
attitudes of the staff, empathy, staff capacity, and trust predict the level of satisfaction of
Vietnamese with regards to public service. Moreover, Izogo and Ogba (2015) studied the
effects of service quality dimensions on customer satisfaction. The results showed that
tangibility, assurance, reliability, empathy, and responsiveness predict the level of satisfaction
and the loyalty of customers.

There are several research studies in the relationship between service quality and customer
satisfaction from different countries. Khuong and Dai examined the factors that impact level
of satisfaction of the local taxi customers in Ho Chi Minh, Vietnam. The findings showed that
reliability and responsiveness significantly affect the level of satisfaction of taxi riders. Yilmaz,
Ari, and Gürbüz (2018) evaluated the level of customer satisfaction of bank clients in Turkey
in light with the service quality of these banks. The results reflected that reliability, tangibility,
assurance, and accessibility predict customer satisfaction of Turkish bank clients. Furthermore,
Raza, Jawaid, and Hassan (2015) scrutinized the level of customer satisfaction of Pakistanis in
terms of Internet banking. The results showed that reliability, assurance, tangibility, and
responsiveness are directly related to customer satisfaction. In Iran, the study of Akbari and
Darabi (2015) focused on the service quality dimensions in relation to customer satisfaction
of bank clients. The findings showed that all the five (5) dimensions contribute to the level of
satisfaction of bank customers.

Rahman et al. (2013) examined the level of significant differences in customer satisfaction
when grouped based on their demographic factors. The findings showed that there is no
significant difference in customer satisfaction based on gender, age, civil status, income level,
level of education, and religion. Additionally, Seiler, Rudolf, and Krume (2013) scrutinized the
significant differences in customer satisfaction among bank clients when grouped according
to demographic characteristics. The results indicated that there is a significant difference in
customer satisfaction based on demographic factors such as employment status, type of
private banking service provider, and size of liquid assets. Moreover, Ahmad Siddiqui and

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Khan (2017) investigated the impact of demographic factors on customer satisfaction. The
results reflected that there is significant difference in customer satisfactions when respondents
are grouped based on gender, age, education, and income on e-satisfaction, convenience, and
merchandising, financial transactions and perceived value.

From the extensive related literature and studies done, the following were postulated:
H1. There is no significant relationship between the service quality and demographic
factors.
H2a. There is no significant difference in the level of taxpayers’ satisfaction when
grouped according to respondents’ sex.
H2b. There is no significant difference in the level of taxpayers’ satisfaction when
grouped according to respondents’ age.
H2c. There is no significant difference in the level of taxpayers’ satisfaction when
grouped according to respondents’ civil status.
H2d. There is no significant difference in the level of taxpayers’ satisfaction when
grouped according to respondents’ highest educational attainment.
H2e. There is no significant difference in the level of taxpayers’ satisfaction when
grouped according to respondents’ occupation.
H3a. There is no significant relationship between tangibility and taxpayers’ satisfaction.
H3b. There is no significant relationship between reliability and taxpayers’ satisfaction.
H3c. There is no significant relationship between responsiveness and taxpayers’
satisfaction.
H3d. There is no significant relationship between assurance and taxpayers’ satisfaction.
H3e. There is no significant relationship between empathy and taxpayers’ satisfaction.
H3f. There is no significant relationship between overall service quality and taxpayers’
satisfaction.

Figure 1. Research Framework

From the review of related literature and the research hypotheses, the research framework of
the study was crafted. Figure 1 reflects the constructs used in the study. The first frame
specifies the five (5) dimensions of service quality – reliability, tangibility, assurance,

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responsiveness, and empathy. These dimensions were assessed based on their effect on the
level of satisfaction of the taxpayers. The second frame itemizes the demographic
characteristics – sex, civil status, highest educational attainment occupation, and age.
Moreover, the level of significant difference in the level of taxpayers’ satisfaction when the
respondents are grouped based on demographic factors was also gauged.

3. Methods

3.1 Research Design

The present study employed a descriptive-correlational research design. According to Kumar
(2014), descriptive study attempts to describe systematically a situation, a problem, a
phenomenon, a service or program, and/or provides information about it or describes
attitudes towards an issue. Furthermore, correlational research design was employed to
measure the significant relationships between service quality dimensions and taxpayers’
satisfaction.

3.2 Participants of the Study

The participants in the study were identified using purposive sampling technique. A purposive
sampling technique is also called a judgment sampling which is used when the researcher relies
on his or her own judgment in identifying the member of the population to participate in the
undertaking (Collis & Hussey, 2012). The present study’s respondents were the selected 200
taxpayers having transactions at Revenue District Office 21A of Bureau of Internal Revenue.

Table 1. Demographic Characteristics of the Respondents

Demographics Frequency Percent
Sex
Male 83 41.5
Female 117 58.5
Age
25 & above 84 42.0
26 – 35 64 32.0
36 & above 52 26.0
Civil Status
Single 120 60.0
Married 78 39.0
Separated/Annulled 1 .5
Others 1 .5
Highest Educational Attainment
High School 87 43.5
College 88 44.0
Masters/Doctorate 17 8.5
Others 8 4.0
Occupation
Employed 142 71.0
Self-Employed 41 20.5
Others 17 8.5

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3.3 Research Instrument

A survey instrument was used in the study. It was composed of two (2) parts. The first part
itemizes the demographic characteristics of the respondents in terms of sex, civil status,
highest educational attainment, occupation, and age. The second part details the items for each
dimension of service quality – assurance, reliability, responsiveness, tangibility, and empathy –
and the construct on taxpayers’ satisfaction. All items were measured using a 5-point Likert
scale wherein five (5) means strongly agree and one (1) means strongly disagree. The items
used to construct service quality and taxpayers’ satisfaction were taken from various
interrelated studies on service quality in particular with the SERVQUAL model of
Parasuraman et al. (1988).

Table 2. Reliability Test Result

Construct No. of Items Cronbach’s alpha
Tangibility 4 .94
Reliability 4 .95
Responsiveness 4 .95
Assurance 3 .93
Empathy 4 .94
Service Quality 19 .98
Taxpayers’ Satisfaction 3 .95

The research instrument used in the study was tested for reliability. Table 2 presents the
reliability test result using Cronbach’s alpha.

Cronbach’s alpha is used in testing construct reliability (Roldan & Sanchez-Franco, 2012;
Kock, 2015). In assessing the Cronbach’s alpha, the value must be equal to or higher than 0.7
to magnify good reliability (Fornell & Larcker, 1981 and Nunnally & Bernstein, 1994). In Table
2, the results showed that the variables on service quality and taxpayers’ satisfaction satisfied
the criterion for reliability test.

3.4 Data Analysis

The following are the statistical tests used in the present study:
• Spearman’s rho was used to test the relationship between the dimensions of service
quality and taxpayers’ satisfaction since the data are non-normally distributed.
• Mann-Whitney U and Wilcoxon Tests were employed to measure the significant
differences in taxpayers’ satisfaction for demographic factors with two (2) groups.
• Kruskal – Wallis Test was used to test the level of significant differences in taxpayers’
satisfactions for demographic factors with more than two (2) groups.
• Linear Regression was used to identify the predictors of taxpayers’ satisfaction.

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4. Results

4.1 Relationship between Service Quality and Taxpayers’ Satisfaction

To identify appropriate statistical tool in measuring significant relationship between service
quality and taxpayers’ satisfaction, normality tests using Kolmogorov-Smirnov and Shapiro-
Wilk tests were performed. As seen in Table 3, the p-value of the 2-groups (male and female)
on taxpayers’ satisfaction was significant; hence, the data is said to be non-normal. Since the
data is not normally distributed, nonparametric tests were utilized.

Table 3. Normality Tests

Kolmogorov-Smirnov Shapiro-Wilk
Sex Statistic Df p-value Statistic df p-value
Male .155 83 .000 .853 83 .000
Female .193 117 .000 .774 117 .000
*Overall Taxpayers’ Satisfaction is dependent variable

Table 4 shows the results on the relationship between service quality and taxpayers’ satisfaction
with the use of Spearman’s rho, a nonparametric test for measuring significant relationships.
Analysis of the data showed that service quality dimensions (tangibility: r = .598, p <.001;
reliability: r = .764, p <.001; responsiveness: r = .786, p <.001; assurance: r = .799, p <.001;
empathy: r = .882, p <.001) and overall service quality (r = .882, p <.001) are positively and
significantly related to taxpayers’ satisfaction. The findings signify that when the level of
service quality in BIR RDO 21A is high, the level of satisfaction of the taxpayers increases.

Table 4. Relationships between Service Quality Dimensions and Taxpayers’

Satisfaction
Independent Variables Correlation Coefficient p-value
Tangibility .598 <.001
Reliability .764 <.001
Responsiveness .786 <.001
Assurance .799 <.001
Empathy .789 <.001
Overall Service Quality .882 <.001
*Taxpayers’ Satisfaction is the dependent variable

4.2 Significant Differences in Taxpayers’ Satisfaction

Since the data were not normally distributed, Mann Whitney U and Wilcoxon Tests were
performed to measure the level of significant differences in taxpayers’ satisfaction.

Table 5 presents the level of significant difference in taxpayers’ satisfaction when the
respondents were grouped based on sex. Mann-Whitney U and Wilcoxon tests revealed that
there is no significant difference in the level of taxpayers’ satisfaction between male (N = 83,
mean rank 97.65) and female (N = 117, mean rank = 102.52) respondents (U = 4619, W =
8105, Z = -.626, p = .532). The result indicates that the level of satisfaction of the taxpayers
are almost the same.

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Table 5. Significant Difference in Taxpayers’ Satisfaction when Respondents are

Grouped According the Sex
Mean
Sex N U W Z p-value
Rank
Male 83 97.65
4619 8105 -.626 .532
Female 117 102.52

Table 6 shows the level of significant difference in taxpayers’ satisfaction when the
respondents were grouped based on age groups. Kruskal-Wallis test revealed that there is no
significant difference in the level of satisfaction of the taxpayers (X2(2) = .030, p = .985) among
the age groups 25 and below (N = 84, mean rank = 99.92), 26 – 35 (N = 64, mean rank =
100.40), and 36 and above (N = 52, mean rank = 101.56).

Table 6. Significant Difference in Taxpayers’ Satisfaction when Respondents are

Grouped According to Age
Age Group N Mean Rank X2 df p-value
25 & below 84 99.92
26 – 35 64 100.40 .030 2 .985
36 & above 52 101.56

Table 7 depicts the level of significant difference in taxpayers’ satisfaction when respondents
were grouped based on civil status. Kruskal-Wallis test revealed that there is no significant
difference in the level of satisfaction of the taxpayers (X2(2) = 2.345 p = .504) based on the
following civil status: single (N = 120, mean rank = 97.75), married (N = 78, mean rank =
104.52), separated / annulled (N = 1, mean rank = 60.50), and others (N = 1, mean rank =
156.50).

Table 7. Significant Difference in Taxpayers’ Satisfaction when Respondents are

Grouped According to Civil Status
Mean
Civil Status N X2 df p-value
Rank
Single 120 97.75
Married 78 104.52
2.345 3 .504
Separated/Annulled 1 60.50
Others 1 156.50

Table 8 presents the level of significant difference in taxpayers’ satisfaction when the
respondents were grouped based on highest educational attainment. Kruskal-Wallis test
revealed that there is no significant difference in the level of satisfaction of the taxpayers (X2(2)
= 2.345 p = .504) based on the following attained education: high school (N = 87, mean rank
= 96.03), college (N = 88, mean rank = 104.08), masters/doctorate (N = 17, mean rank =
98.85), and others (N = 8, mean rank = 113.25).

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Table 8. Significant Difference in Taxpayers’ Satisfaction when Respondents are

Grouped According to Highest Educational Attainment
Highest Educational Mean
N X2 df p-value
Attainment Rank
High School 87 96.03
College 88 104.08
1.432 3 .698
Masters/Doctorate 17 98.85
Others 8 113.25

Table 9 shows the level of significant difference in taxpayers’ satisfaction when the
respondents were grouped based on occupation. Kruskal-Wallis test revealed that there is no
significant difference in the level of satisfaction of the taxpayers (X2(2) = 2.345 p = .504) based
on the type of occupation: employed (N = 142, mean rank = 98.74), self-employed (N = 41,
mean rank = 103.23), and others (N = 17, mean rank = 108.62).

Table 9. Significant Difference in Taxpayers’ Satisfaction when Respondents are

Grouped According to Occupation
Occupation N Mean Rank X2 df p-value
Employed 142 98.74
Self-Employed 41 103.23 .634 2 .728
Others 17 108.62

4.3 Predictors of Service Quality

To identify the antecedents or predictors of service quality, linear regression was performed.

Table 10 reflects the result of the linear regression. Analysis of the data revealed that reliability
(β = .222, p = .002), responsiveness (β = .177, p = .013), assurance (β = .296, p = .000), and
empathy (β = .300, p = .000) are the predictors of service quality. The regression coefficients
of the predictors are significant and positive which means that when respondents feel that
employees of BIR RDO 21A are reliable, responsive, assuring, and provide empathy, their
satisfaction increases. The r-square = .825 signifies that about 83% of the variability of
taxpayers’ satisfaction can be explained by assurance, reliability, responsiveness, and empathy.
The remaining 17% can be explained by other variables not included in the study.

Table 10. Predictors of Service Quality

Unstandardized B Standardized
Model p-value R-square
Coefficients Beta Coefficients
1 (Constant) .221 .144
Tangibility -.037 -.034 .511
Reliability .229 .222 .002
.825
Responsiveness .178 .177 .013
Assurance .289 .296 .000
Empathy .300 .300 .000
*Taxpayers’ Satisfaction is the dependent variable

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5. Discussion and Conclusion

After thorough analysis of the data, the findings showed the respondents are much satisfied
with the service quality (in all dimensions) provided by BIR RDO 21A. The results indicate
that in terms of the physical or tangible aspect of service quality, which includes up-to-date
equipment, appealing physical facilities, physical appearance of BIR employees, and relevance
of the physical facilities in terms of the BIR services, the respondents agreed that these are all
present in the organization; these items were rated by them to be satisfactorily. In terms of
reliability, the respondents find BIR RDO 21A having staff who show sympathy and
reassurance, whom they believe are trustworthy, who deliver services they have promised, and
who keep records with accuracy. Moreover, in terms of responsiveness, the respondents find
BIR RDO 21A responsive to the needs of their clients and is fast in serving its customer. They
further believed that the employees are helpful and timely in responding to the clients’
demands. With regard to assurance, the respondents find BIR RDO 21A employees polite and
they feel safe when they transact with them. And lastly, the respondents believe that BIR RDO
21A employees as empathetic. They feel that employees provide individualized attention and
attend to customers’ needs well. Moreover, the respondents find the operating hours of BIR
RDO 21A convenient.

Analysis of the data also indicated that the respondents were generally satisfied with the
services provided by BIR RDO 21A and the organization’s employees. Furthermore, it was
also found out that the five (5) dimensions of service quality were significantly and positively
related to taxpayers’ satisfaction. This finding signifies that when the level of service quality
dimension rises, taxpayers’ satisfaction also rises. It was also revealed that the overall service
quality is significantly and positively related to taxpayers’ satisfaction. These findings were in
consonance with previous studies including Sulieman (2013), who scrutinized the effect of
SERVQUAL dimensions on customer satisfaction. As expected, the findings showed that
SERVQUAL dimensions affect customer satisfaction. Same is true with the study of Ali and
Raza (2017) who argued that, as the level of SERVQUAL dimensions increase, the level of
customer satisfaction also increases; therefore, there is a positive relationship between
SERVQUAL dimensions and customer satisfaction. Additionally, Akbari and Darabi (2015)
also produced identical study where the results are similar with previous studies indicating that
customer satisfaction increases due to SERVQUAL dimensions.

In terms of the test of significant differences, the results showed that no significant differences
exist in taxpayers’ satisfaction in terms of sex, civil status, highest educational attainment,
occupation and age. Preceding studies have mixed results such as the study of Rahman et al.
(2013) who examined the level of significant differences in customer satisfaction when the
respondents were grouped according to demographic factors. The findings revealed that there
is no significant difference in customer satisfaction based on gender, age, civil status, income
level, education level and religion. Additionally, Seiler, Rudolf, and Krume (2013) indicated
that there is a significant difference in customer satisfaction based on the following
demographic factors: employment status, type of private banking service provider, and size of
liquid assets. Moreover, Ahmad Siddiqui and Khan (2017) found out that that there is
significant difference in customer satisfactions when respondents were grouped based on

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Vol. 2, Issue 1, February 2021

gender, education, age and income on convenience, e-satisfaction and merchandising,

perceived value, and financial transactions.

The linear regression test revealed that the predictors of taxpayers’ satisfaction are assurance,
reliability, responsiveness, and empathy. Prior studies such that of Lau, Cheung, Lam, and Chu
(2013) who also examined the level of service quality, and customer satisfaction and found out
that all five (5) dimensions are significantly related to customer satisfaction. Among the five
(5) dimensions, four (4) were identified as strong predictors of customer satisfaction. These
are assurance, responsiveness, reliability, and tangibility. Johnson and Karley (2018) argued
that assurance, empathy, and responsiveness are the dimensions of service quality that affect
customer satisfaction. Furthermore, Ali and Raza (2017) examined how service quality affects
customer satisfaction and the findings showed that service quality is significantly and positively
related to customer satisfaction. A similar study was also conducted by Van Quyet, Vinh, and
Chang (2015) and they found out that all five (5) dimensions of service quality positively affect
the level of satisfaction.

Since the r-square is at around 83%, other researchers may find interest in looking for other
variables that may affect taxpayers’ satisfaction in BIR RDO 21A. One of the limitations of
the present study is that the unit of analysis was focused on one government agency in
Pampanga. Other researchers may find interest in expanding the respondents by looking into
the satisfaction of customers, but this time, with other government agencies at regional or
national level.

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