Argentina accuses Procter & Gamble of tax fraud, halts operations

Argentina accuses Procter & Gamble of tax fraud, halts operations

ARGENTINA - Argentina has accused the world's No. 1 household products maker, Procter & Gamble, of tax fraud and suspended its operations in the South American country, according to a statement issued on Sunday by the AFIP tax authority.

The accusation is that the company over-billed US$138 million (S$178 million) in imports to get money out of the country, according to the statement, which was published on Argentina's presidential website (www.prensa.argentina.ar). "P&G funneled currency abroad and hid income that was subject to tax in Argentina," it said. "We have to put an end to these tricks used by international companies," the statement added.

Procter & Gamble did not immediately respond to requests for comment.

Argentina has restrained access to foreign currency in a bid to retain central bank reserves, which have fallen 17 per cent over the last 12 months to about $28 billion.

The country has been banished from the international capital markets since its 2002 default on about $100 billion in bonds, compounded by another sovereign default in July.

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