Saudi government is planning to levy a 50 per cent tax on soft drinks starting from the second quarter of 2017, said a report.

The levy was announced as Saudi Arabia unveiled the state budget plan for the fiscal year 2017, according to CNN Money.

Under the new measure, a 100 per cent tax would also be levied on tobacco and by-products, as well as energy beverages.

The tax levied on selected products that pose health risk was endorsed during the 36th GCC Summit, said the report.

The list of taxable products could be expanded to include sugary beverages and food products which were cited among the causes of the alarming increase in the rate of diabetes and obesity in Saudi Arabia, it added.