Tax treaties with multinational companies can deprive poor countries of significant tax revenues without achieving much in return, reveals groundbreaking research – prompting developing countries to review and renegotiate treaties.


  • Martin Hearson's research has provided an invaluable resource for campaigning non-governmental organisations (NGOs). ActionAid, an international development organisation working in 45 countries, has built its new tax treaty campaign on his research, and used it in lobbying for the renegotiation of older agreements and a challenge to the ratification of newer ones in Malawi, Nigeria, Zambia and other African countries.
  • His work has prompted increased political interest in the tax treaty issue in developed countries. In April 2015 his evidence to the Danish parliament's Fiscal Affairs Committee, following the ratification of a tax treaty between Denmark and Ghana, contributed to the committee's demand for more input into the negotiation of future treaties.
  • His research informed parliamentary questions posed during discussion of the 2015 treaty between Senegal and the UK – raising unprecedented interest in the topic.
  • He has improved tax treaty scrutiny in developing countries through, for example, his creation of the ActionAid Tax Treaties Dataset. This analysis of 500 tax treaties enables policymakers and researchers to assess specific treaties, as well as national and regional negotiation trends.
  • In November 2015 he was invited to present the dataset to the International Monetary Fund's Fiscal Affairs Department, and was an expert advisor to the 2015 World Development Report from UNCTAD (United Nations Conference on Trade and Development).

“Martin Hearson has been an invaluable resource for our work on tax justice in general and for our tax treaties advocacy and campaigns work in particular.” (Anna Thomas, Head of Policy, ActionAid UK)

About the research

Martin Hearson's research has highlighted how tax treaties reduce the tax that some of the world's poorest countries can collect from multinational companies – depriving the world's poorest communities of hundreds of millions of pounds every year. “Many developing countries entered into tax treaties because they believed they would attract inward investment, but my research shows that the costs to developing countries often far outweigh any benefits,” says Hearson.

Many of these treaties were signed in the 1970s when tax systems were very different, he points out. “They have remained in force when the original argument for them no longer holds. These are complex legal agreements, and many developing countries have historically lacked the policymaking capacity and legal expertise to assess them properly. So policymakers have tended to act with limited information, but that's proved very costly.”

Hearson suggests that tax treaties alone cost some developing countries more than five per cent of their corporate tax revenue (eg, $42 million lost tax in Zambia annually) and that it's time to either renegotiate or, in some cases, cancel them altogether.

“These treaties are very obscure, and a key problem has been the difficulty in helping policymakers and negotiators understand exactly what's at stake and which treaties are the worst offenders, and which less so,” he explains. Hearson's newly developed dataset of 500 current treaties provides this information in a simple way. The dataset is also accessible to audiences who are not necessarily familiar with the technical content of tax treaties, such as journalists and civil society organisations.