The special rate variation would see rates increase by three per cent per year for three years, starting in the 2019/20 financial year.

The plan was approved by councillors in Tuesday nights meeting, but must still be approved by the Independent Pricing and Regulatory Tribunal (IPART).

Council documents show by the third year, council would have $600,000 in additional revenue, with rates sitting at an average of $3954.

Mayor Col Murray said council needed an event attraction strategy and compared securing big events to an auction.

“It usually goes to the highest bidder,” Cr Murray said.

“The implementation of a Special Rate Variation on the all business rate categories will result in increased revenue that would be specifically allocated for the attraction and subsidisation of new major events.

“None of the funds would be used for other purposes such as wages, administration or for existing events.”

Council will now begin a "extensive community consultation program to gauge support" for the rate rise.

Cr Murray acknowledged that rate rises are rarely welcomed by the community, but pointed out Tamworth Regional Council's business rates were considerably lower than other major regional centres in NSW including Albury, Bathurst and Wagga.

“I believe there is capacity for our business community to contribute to the region’s ongoing growth through this levy and I encourage them to actively engage in the conversation when we launch our community engagement strategy in the coming months,”

“The chamber of commerce has indicated that they are willing to work with us in building a framework that will drive the event attraction strategy and provides transparency in use of the funds.”

Cr Phil Betts said the additional revenue would benefit the both the business community and the broader community.

“The touch footy event that we use to hold in Tamworth has gone to Coffs Harbour – that brings 600 people,” Cr Betts said.

Cr Mark Rodda was the only councillor to vote against the proposal.

“Small businesses are already plagued with a raft of state and federal charges, taxes and levies,” Cr Rodda said.

“They look to local government to understand their suffering, not to be diving into their wallets at every turn.”

Cr Rodda said he had no doubts some businesses benefited from large events, but he would prefer to protect the viability of smaller businesses, “instead of always looking at ways of imposing more taxes on them”.

“There will be plenty of businesses undoubtedly irritated by this proposal,” he said.