Reengineering Tax Service Quality Using a Second Order Confirmatory Factor Analysis for Self-Employed Taxpayers

Abstract

Abstract — Reengineering tax service quality using second order confirmatory factor analysis, namely, responsiveness, reliability, in formativeness, assurance and usability is viewed as an enabler of tax administration effectiveness in collecting government revenues. This paper examined the psychometric properties of tax service quality items for tax administration effectiveness on the self-employed taxpayers. A total of 181 received and usable data was collected and analyzed. The findings shows the goodness fit indices are adequate with the model fit indices showing the chi-square value of 215.334, DF =146, p -value = 0.000, normed chi-square CMINDF) =1.475, CFI =0.967 and RMSEA = 0.051. In other words, the findings show that the factors help the tax administrator for providing effective tax system. interpretable w Index Terms — Tax service quality, second-order CFA factor, Bayesian and self-employed taxpayers. I. I NTRODUCTION Due to the success of the pilot study in the United Stated, most of the developed and developing nations have adopted the use of online tax system for tax administration effectiveness. This includes United Kingdom, Canada, Taiwan, Australia, Malaysia, Singapore, Kenya, Thailand and South Africa among other countries [1]. Also the implementation was as a result of the benefit time saving, convenience and cost reduction for both tax compliance and tax administration [2]. However, tax service quality is the overall evaluation of the quality of service being provided by the tax authority with the use of information technology [3]. Parasuraman [4] defines service quality as the scope to which information is conveyed in line with the taxpayer’s expectation. Tax service quality can also be interpreted as the use of resources by the tax administration sector to achieve the best output of the tax system. In addition, [5] added that the general factors contributing to the tax service quality level that involved the availabilities of service and infrastructure facilities.