The Ministry of Justice (MoJ) is asking citizens whether the Information Commissioner's Office (ICO) should have stronger powers.
In April, the ICO was given the ability to hand out fines of up to 500,000 for serious data breaches, but the body has been hoping it could go further.
The MoJ's Call for Evidence will also be looking for views on how the European Data Protection Directive and the Data Protection Act are working, and how they affect individuals and businesses.
Information gathered will be used to inform the UK's stance during negotiations on a new EU data protection instrument, which are expected to start in early 2011.
The Call for Evidence, which the Government noted is not a formal consultation, will last from today until 6 October.
Individuals, private businesses, charities and public authorities will be permitted to share their views on data protection legislation in the UK.
"Since these laws were introduced just over a decade ago, the way we live our lives has been radically transformed by the digital revolution," said Lord McNally, the minister of state for justice.
"Whether we are shopping online, banking or renewing our passport, we are handing over the keys to our personal information almost daily."
He added: "This Government is committed to protecting civil liberties and personal privacy, and we want to make sure that current laws do not allow unreasonable intrusions into people's lives while balancing this with the need to ensure the laws are not placing undue burdens on business and other organisations that collect personal data."
IT PRO contacted the ICO for comment but it had not returned our request at the time of publication.
