Argentina to scrap £2.5bn tax cuts

Desperate Argentina is to scrap £2.5bn worth of tax cuts in a bid to run a balanced budget next year and win badly needed cash from the International Monetary Fund, the economy minister has said.

Fresh from weekend meetings with IMF officials in Washington, Domingo Cavallo said the cash-strapped country needed to boost tax revenue in order to regain access to funds it must have to remain solvent.

Cavallo said President Fernando De la Rua’s administration would shelve the tax breaks to allay the IMF’s fear that Argentina would end with a bigger budget deficit than the government had predicted in 2002.