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Rishi Sunak is promising a "radical" change if he becomes prime minister by cutting the basic rate of income tax from 20p in the pound to 16p by the end of the next parliament.
In his latest pitch to Conservative Party members, the former chancellor claims the 20% reduction would be "one of the most far reaching cuts to income tax that we've seen".
Mr Sunak says it will be funded by "additional tax receipts generated by forecast economic growth", promising to not increase government debt to cover the cost.
Speaking to reporters ahead of a hustings in Exeter tonight, and as party members begin to receive their ballots for the final leadership vote, Mr Sunak said: "We'll [reduce income tax] responsibly over time, continuing to reduce our borrowing.
"And we'll do it by growing the economy, taking advantage of our Brexit freedoms and getting our businesses to invest more and innovate more through the tax reforms that I am going to put in place."
The team of his competitor, Foreign Secretary Liz Truss, accused Mr Sunak of performing "another U-turn on cutting tax", after announcing he would cut VAT on energy bills last week.
But he defended that plan, saying it was "right that we go further", adding: "As prime minister what I'd want to do is cut VAT on energy bills to provide a little bit of extra help to people over the autumn and winter."
In an earlier statement, Mr Sunak also appeared to take a swipe at his rival, saying: "There is no more serious choice than the one now facing Conservative members: to decide the person who leads our country at home and abroad during difficult times.
"As they turn to that decision I would urge them to treat with caution any vision that doesn't involve any difficult trade-offs and remember that if something sounds good to be true - then it probably is."
Tax has been the main dividing line in the competition between Mr Sunak and Ms Truss to become PM.
She has outlined £30bn of tax cuts if she was to take office, including scrapping the proposed rise in corporation tax and reversing the government's National Insurance hike.
Mr Sunak and a range of economists have claimed such action would see the current record high inflation in the UK go up even further.
But Ms Truss claims her plan would "increase tax revenues by growing the economy", accusing the former chancellor of policies that "choke off growth by raising taxes" to a 70-year high.
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A source from her campaign team said while Mr Sunak's tax reductions were "welcome" it was "a shame he didn't do this as chancellor when he repeatedly raised taxes".
They added: "Unfortunately it's a case of 'jam tomorrow'. People need tax cuts in seven weeks not in seven years. He has also made it conditional on getting growth first - knowing full well that his corporation tax rises are contractionary.
"The public and Conservative Party members can see through these flip flops and U-turns."
However, one of Mr Sunak's supporters, Tory MP John Glen, refuted the claim, saying the ex-chancellor was "setting out the challenge and also the aspiration".
He told Sky News: "Where we agree as Conservatives across the party is we do want to bring tax cuts forward as quickly as we can when they are affordable, not when they are unfunded, they are going to burden future generations and at a time of great uncertainty in the economy."
Ms Truss' approach has proved popular with the membership, with her leading the polls, as well as gaining the support of significant party figures over the weekend - Defence Secretary Ben Wallace and former leadership hopeful Tom Tugendhat.
And on Sunday night, Chancellor Nadhim Zahawi became the latest to back her campaign, writing in the Daily Telegraph that she would "overturn the stale economic orthodoxy and run our economy in a Conservative way".
But Team Sunak insists it is still "all to play for" and the race "has only just begun", pointing to a Savanta ComRes poll of local Tory councillors showing only a 2% gap between the final two.
Another poll of Conservative voters released today from Ipsos Mori gave his campaign a boost as well, with 49% thinking Mr Sunak would do the job of PM well, compared to 40% for Ms Truss.
But it is only the membership who will decide which candidate gets the keys to Number 10.
In her latest policy pitch, Ms Truss will pledge to "unleash British farming to enhance our food security".
In a visit to the South West of England today, she will promise to remove "onerous EU regulations and red tape" to help "supercharge productivity".
And she will commit to a short-term extension of the government's seasonal workers scheme to get the staff farmers and growers need, as well as working with the industry to address longer-term skills shortages.
"The pandemic and cost of living crisis have shown it is more vital than ever for us to ensure we have a high quality and affordable supply of British food," Ms Truss said.
"As a former Department of Environment, Food and Rural Affairs secretary of state, I understand the challenges faced by farmers and they can trust me to deliver the changes they need."
But a spokesperson from Mr Sunak's team said her announcement "does nothing for farmers and food".
They added: "She blames Brexit and fails to see the opportunities from it to help farmers and food production, has no plan to tackle inflation which has hit input costs hard, and neglects to mention trade deals because of her record in this area.
"The true Remainer colours are starting to show."
The pair will continue facing hustings this week and they will take part in a Sky News debate on Thursday, hosted by Kay Burley.
The membership will have until 2 September to cast their vote and the winner will be announced on 5 September.
The new prime minister is then expected to replace Boris Johnson the following day.