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Nadhim Zahawi pledged to spend billions more on easing the cost-of-living crisis as he stepped up his Tory leadership campaign.
The Chancellor said he would remove VAT and green levies from energy bills, cut income tax and reduce business taxes.
He said it was a time of “national economic emergency” which required a major response.
Speaking at an event hosted by the Conservative Way Forward group, Mr Zahawi said: “Finally, after too many years of tax and spending skyrocketing, the political landscape is once again coming back to the sensible policies championed by the great lady, Margaret Thatcher.”
He promised that “tax as a percentage of GDP (gross domestic product, a measure of the size of the economy) will fall year on year if I become prime minister”.
In April next year basic rate income tax would be cut by 1p to 19p and then to 18p in 2024.
“That will give households back around £900 a year on average,” he said.
Mr Zahawi acknowledged the need to tackle climate change but said the economic “emergency” meant action was needed to reduce bills.
“I will abolish VAT and green levies – temporarily – for two years,” he said. “It is simply not right that families are currently having to see their bills skyrocket and they’re struggling with it and we do nothing.
“We will continue to meet our net zero target for 2050 but this is a moment of emergency and we have to act like it.”
He also indicated he would reverse the planned rise in corporation tax, which is due to increase from 19% to 25% next year.
Mr Zahawi said the £37 billion package of support to deal with the cost-of-living unveiled by Boris Johnson and Rishi Sunak had not been a success.
“People do not understand it,” he said, and “they can’t feel it making their lives easier”.