Purpose
– This study aims to evaluate effects of tax system reforms on tax obstacles to investment in Egypt and tax evasion. It also aims to analyze differences in burden of tax obstacles and extent of tax evasion among different types of enterprises after applying tax reforms.

Design/methodology/approach
– The study uses data from Productivity and Investment Climate Surveys 2004 and 2008. A number of indices are constructed to measure incidence and severity of tax obstacles. Two indicators are constructed to estimate incidence and extent of tax evasion. The study adopts a descriptive analytical comparative approach to evaluate changes and differences in severity of tax obstacles, and their effects.

Findings
– The results obtained show that tax reforms have resulted in a significant decrease in severity of tax obstacles. However, they are still major obstacles. The overall decrease hides differences in the burden of these obstacles. Reforms were not enough to address needs of small enterprises. The extent of tax evasion decreased. However, it is still a problem as tax obstacles are still major obstacles.

Research limitations/implications
– There is a need for more detailed data about problems enterprises face in each phase of interaction with tax administrators and managers’ suggested solutions.

Originality/value
– The study evaluates the actual effects of a major economic reform, on the microeconomic level during an important period rather than exploring enterprises’ expectations. The results show that there is a need for more reforms targeting small enterprises.