Saudi Arabia will impose a special tax on tobacco and sugary drinks on June 10, as part of a series of steps towards closing a budget deficit caused by low oil prices, said a report.

Officials have said they expect to raise between SR8 billion ($2.1 billion) and SR10 billion ($2.7 billion) annually from the tax, which will comprise a 50 per cent levy on soft drinks and 100 per cent on tobacco and energy drinks, said the Times of Oman report.

Khalid Khurais, director of the selective tax unit of the General Authority of Zakat and Tax, told Al Arabiya television on Sunday (May 26) that rules covering the tax were published in the official gazette last week and would take effect after 15 days, it added.

The tax marks a big change in policy for Riyadh, which has traditionally kept taxation minimal but now plans a series of levies and fees by 2020 to close a budget gap that totalled SR297 billion ($79.1 billion) last year.