Saudi Arabia is tripling its value added tax (VAT) as part of austerity measures to support its coronavirus-stricken economy.
The government in Riyadh also said it would suspend its cost of living allowance to support state finances.
The oil-rich nation has seen its income plummet, with the impact of the pandemic forcing global energy prices.
The kingdom first introduced VAT two years ago as part of efforts to reduce its dependence on world oil markets.
The Saudi Arabian state news agency said that VAT will increase from 5% to 15% from 1 July, while the cost of living allowance will be suspended from 1 June.
"These measures are painful, but necessary to maintain financial and economic stability [the] medium to long term … and overcome the unprecedented coronavirus crisis with the least possible damage, "Finance Minister Mohammed al-Jadaan said in the statement.
The announcement came after government spending exceeded revenue, taking the kingdom to a $ 9 billion budget deficit in the first three months of the year.
This is how oil revenue in the period fell by almost a quarter over the previous year, to $ 34 billion, reducing total revenue by 22%.
At the same time, Saudi Arabia's central bank saw its foreign reserves fall in March at the fastest rate in at least two decades and the lowest level since 2011.
Measures to combat the impact of the coronavirus are expected to slow the pace and scale of economic reforms launched by Crown Price Mohammed bin Salman.
Last year, Saudi Arabia raised a record $ 25.6 billion in the initial public offering of shares by state-owned giant Aramco in Riyadh.
The sale of shares was at the heart of Crown Prince Mohammed bin Salman's plans to modernize the economy and remove it from its dependence on oil.