A Saudi woman uses the Careem app on her mobile phone in Riyadh, Saudi Arabia, January 2, 2017. Picture taken January 2, 2017. (Reuters photo)

RIYADH, Jan. 30 (Xinhua) -- The Saudi cabinet on Monday approved a unified agreement on value added tax (VAT) and selective taxes in the Gulf Cooperation Council (GCC) member states, Saudi Press Agency reported.

Saudi Arabia and other Gulf countries will impose a VAT of 5 percent on all services and products, except 100 main commodities, as of the first quarter of 2018.

The decision will end decades of a tax-free regime as a measure to cope with economic difficulties following a drop in international oil prices.

The selective taxes, on "harmful products" such as tobacco, will be imposed from April. Tax on tobacco, now at 50 percent, will be raised to 100 percent, the same level as those for fizzy and energy drinks.