Income from business rates in Sheffield is expected to increase by £1.6m next year due to an increase in the number of new companies, the Government claims.
Firms paid a total of £213.5million this financial year, and this is set to rise to £215.1m next year.
Ministers say the increase is down to the rise in the number of new enterprises.
Companies House figures show 3,742 new firms were registered in Sheffield in 2015.
In South Yorkshire, 9,290 were registered while 5,359 dissolved, taking the total number to a record 52,205 companies.
Local government minister Marcus Jones said councils would keep all business rates from 2020 - up from 50 per cent currently.
And they would have the power to abolish the uniform business rate, allowing them to cut them to stimulate growth in their area and attract new businesses.
He added: “Councils will also be handed the power to cut rates as much as they like to boost enterprise in their local areas.”
Areas that have city-wide elected mayors - set to include Sheffield City Region - will have the power to increase rates for spending on local infrastructure projects, he added.
But business rates expert Paul Turner-Mitchell insisted the high costs were stifling investment.
He added “When businesses in England pay the highest level of property taxes of any G7 nation, EU or OECD country and the level of business rates are stifling investment, particularly from overseas, it beggars belief the Government want to brag about record rates income.
“It is particularly insensitive to the 278,000 SME shops, pubs, restaurants and cafes who will lose £1,500 retail relief in April adding an extra half a billion pounds to their tax burden and raising their rates bill by on average 20 per cent this year.”
There were 1,000 SMEs in Sheffield receiving a £1,500 retail relief discount due to come to an end in April, he added. That would add £1.5m to their rates on top of the annual inflationary increase of 0.8 per cent.