More than 400,000 motorists paid their car tax online in 2004, according to figures released by the Department of the Environment.
The figures also show that the uptake has been higher in Dublin, where 35 per cent of drivers have used the online service, compared to 21 per cent nationally.
The Department said the online motor tax service was a good example of 'e-government'.
"The take up is very high for a system that was introduced last March," a spokesman said. He added that the service only catered for motorbikes and private cars and not commercial vehicles.
The € 2.3 million system allows drivers to pay their motor tax online by laser or credit card. The tax disc is then sent out in the post. Although there is a requirement for drivers to state the name of their insurer, no physical proof of an insurance certificate is necessary. This concerned some civil servants who believed the production of an insurance certificate was the best compliance method.
However, the Department of Environment said the most effective means was the checking of insurance discs on car windscreens by gardai.
The last survey of motor tax compliance in 2001 revealed 4.6 per cent of vehicle owners persistently evaded motor tax, compared to 2.8 per cent in a previous survey five years earlier. This cost the Government approximately &8364;30 million in motor tax receipts.
The increase in online motor tax payments is expected to reduce the workload in many motor tax offices.
However, the Department said this would not necessarily lead to job losses.
"The issue of the need to redeploy staff is a matter for individual local authorities as it arises," said a spokesman.
There are further plans to put more Government services online in the near future, including passports, driving licences and planning permission applications.
PA