Electronic payment of indirect taxes: how do taxpayers perceive the service quality?

Abstract

The Government of India introduced the electronic payment of central excise and service tax in 2005. However, there has been no evaluation of the service quality of the system introduced. From expert interviews, the author developed a questionnaire for studying taxpayers perception of the service quality. Factor analysis of the responses yielded four factors of user friendly websites, ease of payment process, system reliability, and troubleshooting. Thirty-five users of the system rated the current, satisfying, and ideal levels of the service quality. Along all four dimensions of e-payment, taxpayers were satisfied with the current service quality. However, there was a significant difference between the satisfying and ideal levels of service quality. Apparently, e-payment process still has to reach the level that is ideal to taxpayers. Comparisons were also made within each level of service quality for all 4 dimensions of e-payment process. Perception of service quality for ease of payment process and system reliability was same. But there is a significant difference between perception of service quality for user friendly websites and troubleshooting. Satisfactory level of service quality was same for user friendly websites and ease of payment process. However satisfactory level of service quality was significantly different for system reliability and troubleshooting. Ideal level of service quality was same for user friendly websites and ease of payment process but it was significantly different for system reliability and troubleshooting. Thus, it is observed that taxpayers level of satisfaction for different dimensions of e-payment process is different. Studying taxpayers perception of service quality of electronic payment can help banks and government in making necessary changes in the system. These inputs will be especially important and relevant when taxation department is considering making all tax payments mandatory through electronic mode. Further integration of all tax payments in single window is also under consideration, wherein number of taxpayers, number of transactions will grow and systems have to be built as per taxpayers expectations.