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Page last updated at 14:16 GMT, Monday, 15 June 2009 15:16 UK

New tax plan sparks China protest

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Protesters in the south-eastern Chinese city of Nankang have overturned police cars and blocked roads over plans to more strictly enforce payment of taxes.

Officials in Nankang said several hundred protesters blocked a major road while others delivered a petition to a local government office.

Video posted on the internet showed several overturned police cars and large crowds on a main street.

Nankang officials blamed the protest on a misunderstanding over the tax plan.

Decline in demand

"The whole incident revolves around a new campaign to reorganise the local furniture industry," said a statement on the Nankang government's web site.

"Starting from 15 June, the city is implementing a new approach to tax collection and management."

Some furniture-store owners "mistakenly thought that the municipal party and government wants the furniture industry to collapse," the statement said.

"A portion of them provoked others to hold up the traffic."

China's official Xinhua news agency said the local government's plan to more strictly enforce payment of taxes from the furniture makers and dealers has been suspended in the face of the opposition.

China's furniture industry has suffered in the global economic downturn from a decline in demand from export markets.

Thousands of similar protests over taxes, land disputes or corruption are reported in China each year.



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