Argentina scraps $4bn tax breaks

ARGENTINA'S government is scrapping company tax breaks in a desperate attempt to narrow its gaping budget deficit and persuade the International Monetary Fund to unblock a vital loan.

In the latest move in an escalating financial crisis, at least $4bn (£2.8bn) in tax breaks will be eliminated next year. 'We'll have to find between $4bn and $4.5bn by ending these tax breaks in order to reach the amount of tax collection we've agreed to,' Economy Minister Domingo Cavallo said.

The IMF last week blocked a $1.3bn advance in protest at Argentina's refusal to curb its spending. But the cash is needed if the government is to avoid defaulting on its $132bn debt. New rules limiting Argentines to $250 in cash withdrawals a week sent retail sales plunging by 80% last week.