Dutch road tax: Cheaper cars, costly trips

Amsterdam: Dutch drivers will pay less to buy a car but will be charged tax on every kilometre on the road, a system the government says will reduce traffic jams, fatal accidents and carbon emissions.

The Cabinet approved a bill on Friday calling for drivers of an average passenger car to pay a base rate of $0.03 per kilometre, beginning in 2012.

Drivers of heavier, more polluting vehicles will pay more, and the cost will go up for driving in peak hours.

GPS will track the time, hour and place each car moves and send the data to a billing agency.

But the annual road tax and purchase tax for new cars will be abolished, reducing the price of a new car by 25 per cent, the Transport Ministry said.

Nearly 6 out of 10 drivers will benefit under the system, the ministry said, but government revenue would remain the same.