The purpose of this study was to assess how service quality affects customer satisfaction in the public sector empirical evidence from Ethiopian revenue and customs authority. The study used to identify the relationship between service quality dimensions and customer satisfaction besides the effect of service quality dimensions on customer satisfaction was analysed. To this end gap model of service quality with the application of SERVQUAL instrument. The five dimensions of SERVQUAL instrument named tangibility, reliability, responsiveness, assurance and empathy were used to measure tax payersâ€™ expectation and perception to calculate the gap score within the sector. A total of 384 questionnaire distributed to the tax payersâ€™ those selected in stratified random sampling from different branches of Addis Ababa Administration small and medium tax payersâ€™ office, from this 309 questionnaire were valid and analysed. The data analysis was conducted through statistical techniques such as descriptive statistics, bivariate correlations and multiple linear regressions using SPSS version 20.The result revealed that all five SERVQAUL dimension have negative gap score, in that Assurance dimension has the highest negative gap score whereas tangibility and empathy have lowest gap score, implying that tax payersâ€™ perceive less than their expectation, suggesting a low service quality that leads tax payersâ€™ dissatisfaction with the service provided by ERCA. Moreover all of the service quality dimension have strong relationship with tax payersâ€™ satisfaction, besides the result shown that reliability, responsiveness and assurance has significant effect on customer satisfaction.rnAccordingly Ethiopian revenue and customs authority needs to give more emphasis and due attention to reliability, responsiveness and assurance dimensions of service quality to improve the level of customer satisfaction