7 August 2001: The Dutch Government has approved a plan whereby up to 10 million motor vehicles in the country will be equipped with tracking devices by the year 2006. The idea is that the state will then tax cars on usage and locations of use, on a 'pay-as-you-go' system using GPS to monitor the vehicles.

Dutch drivers currently pay a sales tax on new cars, a vehicle tax based on the price and weight of the car, plus a road tax based on the weight of the vehicle and the type of fuel used. With MobiMiles, drivers will be charged a flat price per kilometre at first but later fees may depend on road categories and time of day.

The Dutch are not unique - the Swiss government is placing wireless tracking devices in 60,000 trucks as part of a new road usage fee system, while Germany plans to put devices in trucks in 2003

The scheme will require people to install a new mobile device in their vehicles, only used for data communications, and could well boost the currently flagging mobile devices manufacturers. In addition to monitoring for taxes, the system could also be used for new in-car mobile services, such as automatic payment of parking fees, maps, and hotelbookings. The service could also provide local traffic information. Payment options are likely to include direct debits.

Though some people are concerned about the system infringing drivers' rights, the developers say only the category and not the actual location of the road is recorded, supporters of the system claim that it will not infringe on drivers' privacy. But some have their doubts. A spokesman for the Dutch Data Protection Authority says there will be a need to introduce privacy protection technology that will make it impossible to match invoice data with whereabouts. TW