A Ukip government would axe income tax for people on the minimum wage by slashing Britain's foreign aid budget and stopping payments from the UK to the European Union.
Nigel Farage said the move would cost £12bn ($19bn, €15bn) but £10bn would be saved from stopping payments from Britain to Brussels.
Ukip would also cut Britain's foreign aid budget, which is ring-fenced at the moment, if it gained power after the 2015 General Election in May.
Farage is expected to announce the policy, of increasing the income tax threshold to £13,500, at Ukip's annual conference in Doncaster.
"We're going to push very hard for there to be no tax on the minimum wage," Farage told BBC Radio 4's Today Programme.
"Giving people no incentive to get off benefit makes no sense. We want flatter, simpler, lower taxes."
The minimum wage is set to increase from £6.31 to £6.50 an hour in October, on the recommendations of the Low Pay Commission, and the tax-free allowance is currently set at £10,000.
A worker on the new minimum wage rate, who works 40 hours a week, will have to pay £704 in income tax and more than £667 in National Insurance Contributions a year.
The Ukip leader also said he wants to cut the upper limit income tax rate to 35p, down from 40p, for people earning up to £55,000.
At the moment there are three tax bands – a 20% threshold (for people with incomes up to £31,865), a 40% (for those people over the 20% limit) and a 45% 'additional' threshold (for people with taxable incomes of more than £150,000).
The announcement comes after Ed Miliband promised a Labour Party government would increase the minimum wage to £8 by 2020.
The latest YouGov poll for The Sun newspaper, which was conducted on 25 September, said 13% of people would vote Ukip in May.
In contrast, the Labour Party led with 37% and the Conservative Party polled 31%.