MSPs have overwhelmingly rejected a bid to give councils the power to set business rates.
Business leaders feared that ending the current uniform business rates system would lead to higher charges and the abolition of relief schemes for smaller firms.
Green MSP Andy Wightman had pushed for the responsibility to be devolved to Scotland’s 32 local authorities.
But MSPs voted by 103 to 10 against the move.
The Tories, who had backed the proposal to change the Non Domestic Rates (Scotland) Bill at committee stage, reversed their stance, with Labour and the SNP also opposed.
Tracy Black, CBI Scotland director, said: “Scottish firms will be relieved to see common sense prevail with the uniform business rate being protected, avoiding further complications to the business rates system.
“As the economy continues to stutter, businesses have long called on politicians to support a simplified rates system that encourages greater investment.”
Andrew McRae, Scottish policy chairman for the Federation of Small Businesses, said: “MSPs had a big call to make today. If they didn’t amend this legislation, we’d have seen bills going up and national reliefs axed.
“This was not the time to hit small businesses with new annual rates bills in excess of £7,000.
“Our MSPs are to be congratulated for recognising this threat and acting decisively to address it.”
David Lonsdale, director of the Scottish Retail Consortium, said: “Retailers, and the business community as a whole, will breathe a huge sigh of relief that MSPs have listened and voted to retain the consistency, simplicity and predictability that the uniform business rate brings, and that the reckless plan to abolish it has been defeated.”
Mr Wightman argued that “Scottish businesses had managed fine for over a century and more during which councils set the rates”.
When councils had been responsible for setting business rates, he said there had been “plenty of opportunities” for firms to lobby local authorities on the issue.
But he claimed business rates were now determined in “private meetings between business elites and the cabinet secretary”.
‘Proper debate’
The Green MSP said: “Non domestic rates is a local tax, it belongs to local government and it belongs to councils.
“Just as the Scottish Parliament sets Scottish tax rates, so too should local authorities set their local tax rates.”
Public Finance Minister Kate Forbes stressed that Mr Wightman’s amendments were “opposed by the majority of Scottish businesses” and the local government body Cosla.
Tory finance spokesman Murdo Fraser said ending the uniform business rate “at this stage was not appropriate and would add risks and complications to doing business in Scotland”.
He added while the Conservatives were “still sympathetic to exploring the principle of localisation we do not believe this is the right time or this bill is the right vehicle for that policy”.
Fellow Tory MSP Graham Simpson said when his party had backed the move previously it was “about allowing a debate to continue”.
Mr Simpson said: “What Andy Wightman has achieved is to have that full and proper debate.”
