An angry agitated crowd of about 2000 people shouted "down with the government" on Thursday before the police moved in.
Police arrested dozens of protesters but no casualties were reported in the second consecutive day of demonstrations against the proposed sales tax, which will raise prices on a wide range of goods by 10%.
Resentment against the bill had prompted thousands to take to the streets earlier this week in the city of Hudaida.
The government accused the powerful Islamic-oriented Islah Party of instigating the protests over sales tax.
The secretary-general of the party, Muhammad al-Yadumi, denied the charge and said the government's economic policies were to blame.
"The policy of the ruling party for the past 10 years has been leading the country towards total poverty," he said.
On Wednesday, similar protests degenerated into stone throwing and left four protesters and several policemen injured.