The Treasury said tax revenues would keep pace with changes prompted by the take-up of electric cars.
The Government claimed “radical reform” was needed otherwise there would be no revenue from motoring taxation once net zero is reached in 2050, and potentially even before in 2040.
The report stated: “The Government must make it clear to motorists who purchase electric vehicles that they will be required to pay for road usage, as is currently the case for petrol and diesel vehicles.
“It must ensure that any alternative road charging mechanism incentivises motorists to purchase vehicles with cleaner emissions while contributing tax revenues to support the maintenance of the road network.”