Assembly members have voted to cap business rate increases at 2%.
Business rates were set to rise by more than 3% from 2014/15, in line with inflation but an order from the Welsh Government to cap the increase was unanimously voted through by AMs.
Local Government and Government Business Minister Lesley Griffiths said: “This is good news for Welsh businesses and local authorities.
“Capping the increase at a level which allows businesses to remain competitive with their counterparts elsewhere in the UK means they are not at a disadvantage, but there will be no financial impact for local authorities which is very welcome given the current economic situation.”
The move follows a decision by the Chancellor of Exchequer George Osborne to cap rate rises in England by 2%.
The Federation of Small Businesses in Wales had previously welcomed the Welsh Government order.
Speaking prior to the vote, FSB Welsh Policy Unit Chair Janet Jones said: “Since the Chancellor announced a month ago that business rate rises were to be capped at 2% in England, businesses in Wales have been waiting to see if Wales would follow suit.
“We welcome the Welsh Government’s decision to do so, as if Wales was to see bigger increases than in England or Scotland, which has also capped the rise at 2%, it would have sent out a very negative message to businesses in Wales and beyond.
“This decision will give some badly-needed respite to hard-pressed businesses on Wales’ high streets, but it doesn’t change the fact that the business rates system is fundamentally broken, with business rates bills often bearing little relation to the rental values on which they are notionally based.
“Because of the formula used here in Wales, small businesses here also face higher bills than those with similar valuations elsewhere in the UK.”
Following the vote on January 14, Nick Ramsay AM, the Conservatives’ Shadow Minister for Business, said: “High business rates are one of the biggest obstacles to small business growth and greater private sector activity in the Welsh economy.
“Welsh Conservatives have long campaigned for business rate reform to help small businesses to stay afloat, expand and create new jobs.
“The Conservative-led coalition took a bold lead in capping rate rises at 2% and it is right that the Welsh Government should not put Welsh businesses at a competitive disadvantage.
“As the latest retail figures show, Wales had the worst festive shopping season of all UK nations and regions and our high streets are in urgent need of support.
“Welsh Conservatives want to see business rates abolished for all small businesses to help small businesses thrive and bring life back to many of our increasingly deserted high streets.
“Labour Ministers must promptly bring forward substantial reform to business rates or risk Welsh high streets and town centre shops dying out within 20 years.”
Silly move! Instead of increasing business rates by 2%, business rate should be cut by 2%. Wales should slash business rate to become a tax haven for businesses. It's time to bring big business into Wales and allow smaller businesses to prosper. When good news is heard e.g. less unemployment and growth, the Welsh Assembly jump on it. They parade it as being fantastic news for Wales. They forget that the economy is still weak and increases in business rates feed the public purse before feeding the needs of businesses (using the Assembly's own words: "backbone of the Welsh economy")