The British Retail Consortium has welcomed the announcement that the Government will examine the structure of the current business rates system.
The review will report its recommendations in time for the budget in 2016, promising to overhaul the current system, which has been in place since 1988.
Danny Alexander, chief secretary to the Treasury, said: "The time has come for a radical review of this important tax. We want to ensure the business rates system is fair, efficient and effective.”
Helen Dickinson, BRC director general, welcomed the move to overhaul a system that she said “acts as a major drag on our economy while punishing our local high street”.
In a statement, she said: “To guarantee that this review is a success it's absolutely crucial that the government seeks authoritative and independent analysis as it progresses, with solutions based on the objective consideration of supporting evidence.
"Taking this approach will guarantee that the government's own assessments are robust and that the necessary sweeping reforms deliver a fairer and sustainable system, one that ensures that the tax more closely reflects the wider economic conditions and allows businesses to remain competitive.
"With cross-party political support for a fundamental review of business rates I'm confident that we can bring about badly needed change, and in doing so securing the investment, jobs and growth that have been held back by the burden of this pernicious tax.
"We look forward to working closely with government and the review process as it progresses."
