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Wisdom Management Journal

Online ISSN: 3107-5622

Service failure and recovery in revenue administration: An empirical study of taxpayer satisfaction in Ethiopia

Volume 2, Issue 2 (Wisdom Management Journal_August 2026)

Authors: Zenabu Girma

DOI: https://doi.org/10.64848/WMJ.2.2.2026.109-118

Page No: 109-118

Keywords: Service failure, Service recovery, Taxpayer satisfaction, Revenue administration, Justice theory, Ethiopia, Public sector

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Abstract

This study examines the incidence and types of service failures encountered by taxpayers in the Ethiopian Ministry of Revenue and evaluates the effectiveness of organizational recovery responses in shaping taxpayer satisfaction. Drawing upon justice theory and the disconfirmation paradigm, the research investigates the relationship between service failure types, organizational recovery responses, and taxpayer satisfaction across three branch offices in Addis Ababa. Using a quantitative explanatory research design, data were collected from 388 taxpayers through structured questionnaires, with a response rate of 90.3%. The findings reveal an alarmingly high service failure rate of 86.9%, with discomfort from employee and departmental service, management decision delays, and procedural problems identified as the most prevalent failure types. Critically, 42.6% of affected taxpayers received no organizational response, and 61.7% received no compensation. Multiple regression analysis demonstrates that distributive justice (B = 0.424, p < 0.001), interactional justice (B = 0.415, p < 0.001), and procedural justice (B = 0.213, p < 0.001) are all significant predictors of taxpayer satisfaction, collectively explaining 72.4% of the variance. The study highlights the urgent need for systematic service recovery strategies in revenue administration and provides empirical evidence to guide policy reforms aimed at improving taxpayer satisfaction and voluntary compliance in developing country contexts.