Chancellor George Osborne will unveil plans to merge income tax and national insurance, as a key element of the next Conservative manifesto, the Times reported, citing sources.
The paper said Downing Street was actively considering the plan.
Fears that merging of the two systems would lead to security concerns had caused Osborne to pull back from making an announcement in April, the paper said citing a source.
"We came within a whisker of doing this at the last budget, but in the end we decided against it," the Times quoted a source as saying.
"They are currently on two separate computer systems and we thought the risk was just too great. But it’s something we could do in the next parliament."
The Treasury's press office could not be reached for comment outside of regular business hours.
(Reporting by Esha Vaish in Bangalore; Editing by Diane Craft)