Wesfarmers managing director Richard Goyder has hit out at companies that don't pay sufficient tax in Australia, and called on multinational corporations "to pay tax in the communities in which they operate".

Mr Goyder, chairman of the B20 summit of the world's biggest corporations, says companies that avoid paying taxes will end up damaging their reputations, as community sentiment turns against the use of tax havens and profit shifting to avoid taxes.

"I think the conversation will head from whether [tax avoidance] is legal to whether it is ethical, and I think that  change in debate is right" said Mr Goyder.

"Wesfarmers derives income and profits from the communities in which it operates, in Australia and New Zealand, and it's fair that we pay tax in those countries. It's absolutely appropriate that we pay our tax."

Earlier this year Fairfax Media revealed insignificant rates of taxation paid by Google, Apple and Ikea on Australian-derived revenue.

"People in communities are within their rights to say 'company XYZ is selling its products here and making its profits here but they are not paying tax, so what's going on'? " Mr Goyder said.

"My personal view is that the tax issue will become a bigger one for companies, and will go directly to their reputation. You are starting to see that happen now and, frankly, I think it should."

Wesfarmers is the biggest private employer in Australia, with more than 200,000 staff.  It owns the Coles, Bunnings, Target, Kmart and Officeworks retail operations, as well as significant agriculture and mining interests, and boasts more than 500,000 shareholders.

According to a report by Tax Justice Network, which estimates effective tax rates using data from 10 years of company accounts, Wesfarmers is one of the largest taxpayers in the country.  The company's average effective tax rate, based on 10 years of data, is 27 per cent. The average tax paid by Wesfarmers between 2004-13 was $508 million a year, on average pre-tax profits of $1.9 billion. It has just a single subsidiary in Bermuda.

Mr Goyder described his own company as "a good corporate citizen" when it came to paying its taxes, but said there was much more debate to be had on the issue of tax "base erosion and profit shifting" – or "BEPS" – which is the practice of multi-national companies shifting profits to low-tax jurisdictions.

"The B20 view is that taxes should be paid in the countries where the income is derived," Mr Goyder said. "In terms of transparency and ethical behaviour underpinning commerce, there is no debate from the business sector, but there will be debate around BEPS.

"I wouldn't call it [BEPS] corruption, but tax issues definitely go to the ethical side of how companies operate, and there is no getting around it."