The Dutch Government has proposed to replace its annual road tax on cars with a new ‘green’ charge, which from 2012, would charge drivers by the kilometre.

Under the plan, Road tax (MRB) and purchase tax (BPM) will be abolished and every car would be fitted with a GPS tracker to record the distance travelled, journey time and the route and send the data to a collection agency that will send out the bill.

The proceeds will then go directly into the infrastructure fund, which will be used to build roads, railways and other types of infrastructure.

The move is expected to halve the number of traffic jams, reduce road fatalities by 7%, increase the public transport usage by 6% and cut CO2 emissions by 10%.

Every vehicle type will have a base rate depending on its size, weight and carbon dioxide emissions. The law will not include taxis, vehicles for the disabled, buses, motorcycles and classic cars.

According to the government, information will be legally and technically protected. Only the motorist will have access to this information and authorities will not be able to access journey details or track any vehicles.

The proposal is currently pending the parliament’s approval to become law.