The Dutch government is considering phasing out a special tax on new cars known as the BPM, the AD reports on Saturday.

The paper says junior finance minister Eric Wiebes is looking at scrapping the tax altogether because it is raising less money and hurting new car sales.

New car buyers often import their vehicles from abroad to avoid the tax, which adds thousands of euros to the cost. The amount paid depends on the car’s carbon dioxide emissions.

The AD says the total amount of tax collected has gone down from €3.6bn to €1.1bn over the past few years, as cars become less polluting. In 2007, the average tax paid per car was €7,200 but this had shrunk to €2,700 by 2013.

Wiebes is due to publish his plans for overhauling all motoring related taxes before the summer, the paper says.