Nicola Sturgeon said the review of the £2.8 billion business rates system should aim to make Scotland the best place in the UK to do business.
She confirmed that Ken Barclay, former chairman of the Royal Bank of Scotland, will lead the Scottish Government’s eagerly anticipated inquiry.
A crucial issue for small businesses, the levy is often cited as a major reason for shop closures.
Business rates are based on rateable values, which traders frequently complain are set too high.
Mr Barclay’s team will consider how business rates respond to wider economic conditions and changing marketplaces, and can support long-term growth and investment.
The First Minister was speaking at the Federation of Small Businesses’ annual conference in Glasgow.
She said the small business bonus scheme brought in by her Government in 2008 had saved businesses more than £1 billion.
Almost 100,000 small business premises now pay zero or reduced rates, but some aspects of business rates are still a source of concern.
The FSB’s manifesto argued that the current system can sometimes discourage investment, and that it should be simplified.
She continued: “So there may well be a case for making changes but that case needs to be considered carefully and the needs of all ratepayers must be balanced.”
She said the review of business rates would “ensure that the system is as fair and effective as possible”.
It is expected to be completed by summer 2017, and Ms Sturgeon urged businesses to contribute to the exercise.
The review, and Scottish Government actions, would be guided by three clear principles.
The recommendations would be revenue neutral and the small business bonus scheme will be retained until at least 2021.
The review should also “reflect the ambition that Scotland will be the best place to do business anywhere in the UK”.
FSB Scottish policy convener Andy Willox said with over a year until the next property revaluation, action may be needed now to improve the system.
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