"This is because for New Zealanders, the company rate is an interim rate before any extra tax is paid on dividends. But with a larger non-alignment between the company rate and the top personal rate the timing advantage of operating as a company starts to bite."
Makhlouf is a former tax official, having worked for Britain's Inland Revenue and chaired the OECD's committee of fiscal affairs.
He regards New Zealand's GST as "the best value-added tax in the world".
"Our strong, consistent advice is that it should be protected from exemptions that undermine it," he said.
"There are far more effective ways to promote social outcomes than by fiddling with the consumption tax on a good or service, and far more effective ways to achieve redistribution than taking GST off whole swathes of goods and services."
Nor does the Treasury see any role for a financial transactions tax.
Countries looking for extra revenue would do far better to tidy up their tax codes and remove"tax expenditures" - concessions or exemptions given to particular groups or types of income that are not given more generally.
They are subsidies by another name, Makhlouf said, and typically favour higher-income taxpayers.
Taxes should distort behaviour as little as possible while achieving the Government's revenue goals.
"Some tax expenditures we do have, like the concessionary treatment of specified mineral mining [largely gold mining], need to be looked at and are being looked at as part of the tax work programme," he said.
The programme was outlined earlier by Revenue Minister Peter Dunne.
While most of it had been foreshadowed already, one new item is work to resolve issues with "black hole expenditure" - business expenditure that does not result in a tax deduction.
"Just because a business incurs expenditure does not automatically mean it should be deductible - either immediately or over time," Dunne said.
"If the expenditure is incurred to provide an enduring benefit, generally the correct treatment is to deny a deduction. If, however, a business incurs expenditure to provide benefits over a finite period, the correct treatment is to provide a deduction over that period," he said.
"We have decided to progress a number of remedial amendments as a matter of priority. These are in the areas of costs incurred on certain fixed-life resource consents and certain company administration costs."
Deloitte chef executive Thomas Pippos said many businesses would see this as a very good first step in dealing with an iniquitous anomaly.
