In return, the government says annual road taxes and purchase tax for new cars will be abolished - reducing the cost of a new car by 25 per cent, the Dutch transport ministry said.

The ministry also says around 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 by 10 per cent, though the tax rate may increase every year until 2018.