PBO finds tax cut costs $3b more

The government's corporate tax cut plan will cost almost $3 billion more than originally predicted.

The Parliamentary Budget Office has estimated the cost of the 10-year plan to bring down the corporate tax rate to 25 per cent at $51.095 billion.

Treasury officials told a Senate committee on May 6 the figure was $48.2 billion.

However, the Greens asked the PBO for an independent costing of the plan.

The PBO's costing, which the agency rated as of "low to medium reliability", was based on information from Treasury and the Australian Taxation Office.

It added: "The estimate of the financial impacts of the company tax rate cut includes an estimated claw-back due to dividend imputation.

"This estimate assumes that companies continue to pay the same proportion of their after-tax income as dividends."

Greens treasury spokesman Adam Bandt MP said it was a "death blow" to the argument that the company tax cuts were affordable.