The Group of 20 must take steps to stop wealthy tax dodgers by reforming a broken international taxation system, Oxfam Australia says.
Treasurer Joe Hockey and Reserve Bank Glenn Stevens will co-host a gathering of their counterparts from the world's major developed and developing countries this weekend in Sydney, the first meeting of Australia's G20 2014 presidency.
Oxfam Australia chief executive Helen Szoke is pleased international taxation is a priority on the G20 agenda, given the billions of dollars that are lost each year in tax loopholes and avoidance.
"This gap must be plugged," Dr Szoke said in a statement on Friday.
"As the G20 host, Australia has the responsibility of leadership to help restore fairness and integrity to the international tax system."
She said the "broken" international tax regime was contributing to widening income inequality and fuelling the "scandal" that the world's 85 richest people own the same wealth as half of the global population.
Rich corporations and individuals are being allowed to squirrel profits away in tax havens, and that facilitates the illicit flow of huge amounts of capital from the world's poorest countries, she said.
Between 2008 and 2010, sub-Saharan Africa lost on average $70.5 billion each year, or more than twice what it received in aid.
Better domestic and international tax systems are vital for rich countries to strengthen their economies, and for developing countries to achieve sustainable economic and human development, she said.
"The only way to ensure that developing countries will benefit from these tax reforms is to involve them in the process from day one," Dr Szoke said.
Oxfam wants this weekend's meeting to agree on a process that will allow all developing countries to participate in an Organisation for Economic Co-operation and Development-led initiative, the "Base Erosion and Profit Shifting project".
This seeks to crack down on companies that declare their profits in low-taxing countries and their losses in high-taxing ones, in order to "wriggle out" of their tax liabilities, she said.