Karnataka’s high slab of value added tax (VAT) at 14.5 per cent, which is the highest among the Southern states, is likely to be slashed by Chief Minister Siddadramaiah in the upcoming budget.

An official source told Express: “The CM had opposed this high tax slab during budget discussions in February, when he was the opposition leader. He had insisted that it was too high, so he is likely to slash it now.”

Budget preparations for the year 2013-14 is in full swing, and a series of meetings with various departments are set to begin on Monday. According to official sources, Siddaramaiah, who also holds the finance portfolio, will present his budget in the second week of July. “The CM has convened a meeting of senior officials of the Mines and Geology and Revenue department,” a source said.

Senior officials from the Finance Department have already briefed the financial position of the state to Siddaramaiah. He is expected to announce few new schemes, modify or scrap some of those already announced by the previous BJP government.

The new Budget is important, as it is perceived to set an agenda for the next five years for the Congress government. It is also expected to give focus to on the fresh sops announced by the CM immediately after he assumed office and make enough provisions for implementation.

On the day of his swearing-in he had announced loan waiver and subsidies to the tune of over Rs 4,409 crore benefitting over 1.38 crore people. Defending his decision to dole out sops which may cause a huge hole to the state exchequer, he had said that the additional burden would be eased through a slew of measures, including enlarging the tax net, plugging pilferage in the collection of revenue and cutting wasteful expenditure.