AMSTERDAM - THE Dutch government has approved a bill to impose a tax on drivers for every kilometre they are on the road, which it says will reduce traffic jams, fatal accidents and carbon emissions.

Beginning in 2012, drivers of an average passenger car will pay 0.03 euros per 1 kilometre (7 US cents per mile). But annual road taxes and purchase tax for new cars will be abolished, reducing the cost of a new car by 25 per cent.

The government says nearly six out of 10 drivers will benefit under the system, which shifts the tax burden to people who drive the most and at peak hours. Congestion is expected to be halved and carbon emissions cut 10 per cent.

Friday's decision said the tax will increase every year until 2018, and drivers of larger cars will pay more. -- AP