A maximum life sentence for the worst cases of human trafficking and exploitation is to be introduced.
It comes after Home Secretary Theresa May said tougher sanctions would be brought in to tackle modern-day slavery earlier this year.
The number of cases discovered in the UK has risen by 25% in the last year, according to government figures.
Trafficking from Albania, Poland and Lithuania has seen a big rise.
Ministers are planning new legislation to simplify the law on slavery, and make it easier to bring prosecutions.
Victims are often targeted for sexual exploitation, construction work or begging gangs.
A new report by the inter-departmental ministerial group on human trafficking has revealed that 1,186 victims were referred to the authorities in 2012, compared with 946 victims in 2011.
The report revealed the largest number of victims were from Nigeria, Vietnam, Albania, Romania and China.
There has been a 300% increase in Albanian trafficking, a 171% increase in victims from Lithuania, and 148% more from Poland since 2011, the report indicated.
But trafficking from Romania and China had fallen, according to the figures.
Victims brought to the UK are forced to do anything from work as house slaves to labour in cannabis farms.
Eastern European women are most likely to be used as prostitutes, according to the report. Men are most likely to be used for construction work.
There is also a trend towards forced begging, and benefit fraud - gangmasters take all the proceeds, returning very little to victims.
Those targeted are often lured to the UK with the promise of free travel, a job and accommodation, sometimes by family members. An alternative is so-called 'debt bonds' where money owed must be repaid by working in the UK.
Klara Skrivankova, from the Anti-Slavery International group, wants greater protection for victims - including the right to stay in the UK.
"Tougher penalties and longer sentences alone do not suffice," she told BBC Radio 4's Today programme.
"Unless the protection of victims is put on a statutory footing, we're unlikely to see more prosecutions."
Victims minister Damian Green said the trafficking of vulnerable men and women was something "no civilised country should tolerate".
"On Anti-Slavery Day I am proud that this government is standing strong against those who profit from human misery and last year gave £3m to support those who have suffered at their hands."
Chief constable Shaun Sawyer of the Association of Chief Police Officers said "the national approach is very much about the protection of the victim", but he added: "I agree that the signposting and signalling could be clearer".
'Source of shame'
"A lot of people are prosecuted for GBH, rape, violence against the individual - it's far easier to bring the perpetrator to justice this way. This Bill will make it easier to prosecute for trafficking."
David Hanson MP, Labour's shadow immigration minister, said that the government needed to focus on prosecutions, pointing to the last government report which identified 946 potential victims of human trafficking, but "only eight convictions".
"The government also needs to wake up to the fact that 60% of trafficked children simply go missing again in the UK after they've come to the attention of the authorities," he added. "It should be a source of shame."
In her Tory party conference speech, Mrs May said an order banning someone convicted of trafficking from being a gangmaster after their release from prison would form a key part of the new bill.