Service quality and tax compliance behavior among Small And Medium Enterprises
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Date
2026-06-08
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Uganda Christian University
Abstract
This study examined the relationship between service quality and tax compliance behaviour among Small and Medium Enterprises (SMEs) in Uganda, with operational efficiency as amediating variable. The study was motivated by the persistent challenges of tax compliance among SMEs despite efforts by the Uganda Revenue Authority to improve tax administration and service delivery. A quantitative, correlational, and cross-sectional research design was adopted. Data were collected from 139 SME owners, managers, and finance personnel using structured questionnaires and analysed using descriptive statistics, correlation, regression, and mediation analysis. The findings revealed a significant positive relationship between service quality and tax compliance behaviour. The study further established that operational efficiency positively influences tax compliance and mediates the relationship between service quality and compliance behaviour. SMEs with effective communication, reliable service delivery, proper record-keeping systems, and efficient internal operations demonstrated higher levels of tax compliance. The results also indicated that operational efficiency reduces administrative burdens and enhances the ability of SMEs to meet their tax obligations. The study concludes that improvements in service quality and operational efficiency can significantly enhance voluntary tax compliance among SMEs in Uganda. It recommends strengthening taxpayer support services, improving digital tax administration systems, expanding taxpayer education programmes, and encouraging SMEs to adopt efficient operational practices to enhance compliance and business performance.
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Undergraduate