It is one of a series of measures proposed by the Finance Secretary Kate Forbes following confirmation of a further £1.1bn of consequential funding arising from UK Government Coronavirus spending.
The move builds on the three month rates relief extension announced in the Scottish Budget last month, and will be taken forward provided the Government receives the funding already assumed from the UK Budget on 3 March, and that requisite funds are available to maintain existing support into 2021/22.
Forbes said: “When I presented our budget last month I guaranteed to extend non-domestic rates relief further if I was given the necessary resources. I can now deliver on that promise, providing the UK Budget in March delivers the funding we require.
“The other measures I am proposing today, including further support for hospitals, schools and local government and measures to tackle climate change, build on our priorities to ensure a robust recovery for our economy and public services.
“This welcome additional consequential funding was confirmed to us yesterday and I wanted give early notice to parliament and provide clarity to businesses.
“We are still in the throes of a national emergency and it is important Parliament works together to respond. I will continue to work with all parties to help deliver a budget for the nation fit for these times.”
Responding to the Financial Secretary's announcement, the Scottish Licensed Trade Association (SLTA) said the extension of rates relief is a ‘much-needed lifeline’ for hospitality in Scotland.
SLTA spokesman Paul Waterson said: “Extending 100% rates relief for the next financial year gives pubs, hospitality and tourism a fighting chance when we do re-emerge from lockdown.
“However, what we need now is for UK Chancellor Rishi Sunak, in his Budget on 3 March, to keep VAT at 5% and also extend current furlough arrangements.
"While rates are generally the biggest fixed rate costs for the hospitality industry, we look forward to further concessions that will help businesses.”
The decision to extend rates relief for businesses in Scotland will pile more pressure onto Sunak to announce similar measures for hospitality in England.
Earlier this week more than 160 businesses leaders signed a letter to the Chancellor calling for an extension to the VAT cut and rates holiday, and asking for a decisive package of financial support for the sector in next month’s Budget.