Foreign donations to political parties, unions, think tanks and lobby groups would be banned under major reforms recommended to the Turnbull government by a powerful parliamentary committee.

The Coalition-dominated Joint Standing Committee on Electoral Matters has urged a wide-ranging prohibition of donations from foreign citizens and foreign entities to all "political actors", citing a need to protect national sovereignty.

"Only Australians should have the power to influence Australian politics and elections," said Liberal senator Linda Reynolds, who chaired the committee.

She acknowledged the ban would be "a complex constitutional and technical challenge for lawmakers" – a task that now lies chiefly with Special Minister of State Scott Ryan.