Lowering the corporate tax rate to 25 per cent from 30 per cent would deliver the economy a $291 billion growth dividend that would generate enough extra tax to more than pay for itself within five years, PwC modelling shows.

In findings that bolster the case for lower corporate taxes, PwC found gross domestic product would be around $100 billion larger by 2025, increasing the flow of revenue to the federal budget, thanks to higher employment, larger dividends and business taxes.

Five years after being phased in, the federal budget would be ahead by $4 billion and annual tax receipts would be $10 billion higher by the middle of the next decade.

PwC's tax boss Tom Seymour says encouraging long-term economic growth should be the purpose of tax reform. Luis Ascui

The Turnbull government is at the centre of a debate about how to use additional revenue from an increased goods and services tax. Groups such as the Business Council of Australia and welfare lobby group, the Australian Council of Social Services, are pushing for corporate tax cuts.

The government is weighing up how much of any increased or broadened GST revenue should be used to cut income taxes to reduce the impact of bracket creep, compensation to the poor and the need to boost funding to states.