The number of untaxed vehicles on the road has fallen to just 1% of the total compared with 1.7% last year, according to the Department for Transport.
It reports that evasion has fallen by more than 40% and that the DVLA collected an estimated 99.1% of all potential road tax revenue this year.
Transport Minister Jim Fitzpatrick said: "The vast majority of motorists properly license their vehicles, keep them in a good condition and make sure they are fully insured. The small minority who refuse to do so are a menace on our roads and are more likely to be involved in wider criminality.
"The DVLA has made it easier than ever to license a vehicle and is also cracking down on those who refuse to do so - so I am delighted that we have seen such a significant fall in the level of road tax evasion.
"But we are not complacent and will continue to take action against those who fail to license their vehicles. There is no way out for road tax evaders."
The DVLA has recently put in place a package of measures which it claims make road tax is now easier than ever to pay, but harder to avoid.
Copyright © Press Association 2008