Under the current fringe benefits tax (FBT) rules, drivers of salary-sacrificed vehicles who drive a high number of kilometres annually receive bigger tax breaks.

According to reports in the Australian media, the government will address this in next week's federal budget.

This follows the recent Henry tax review, which recommended that a flat-rate 20% FBT be implemented, regardless of the number of kilometres driven.

The Australian Greens political party has released Treasury figures that show that removing the current exemption could save the government almost $1 billion over five years.

'Overhauling the fringe benefits tax concession would be a $1 billion victory for common sense and a big first step in removing the perverse fossil fuel subsidies that see billions of taxpayers dollars actually encouraging pollution,' said Australian Greens deputy leader, Senator Christine Milne.

'FBT reform is so obviously a win for the environment and the budget that it has been expected in every federal budget for years.'