Oxfam is welcoming proposed measures to clamp down on multinational companies dodging tax.

The measures include clamping down on multinational companies shifting profits from their New Zealand sales overseas, preventing transfer pricing abuses and a limit placed on interest rates that can be charged on inter-company loans.

READ MORE: Govt reveals changes to target multinationals over tax

"We welcome multinationals' participation in our economy, but we also expect them to pay tax based on their actual levels of economic activity in New Zealand," Collins said yesterday.

In December Oxfam released a report exposing the world's worst corporate tax havens.

The organisation's Executive Director in New Zealand, Rachael Le Mesurier, said as much as $170 billion is being lost through tax avoidance around the world, especially in developing countries.

Le Mesurier said the changes are positive, and a chance for New Zealand to prove it can be a world leader.

"This is something that we're conscious is a good step forward for New Zealand but we're keen to see how New Zealand leads the way in encouraging other countries to do the same."

New Zealand is among 96 countries that are working on a multilateral tax treaty developed by the OECD to tackle tax avoidance strategies used by multinational companies, that are known by the acronym for base erosion and profit shifting (BEPS).

Le Mesurier is also keen to see a focus on the reporting of tax paid by corporations.

"We're also really encouraged too by the possibility of being able to look at more transparent reporting, country by country, on where corporations do and don't pay their fair share of tax - and that applies to those who are also New Zealand-based."

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