Chancellor Philip Hammond is poised to scrap plans to raise business rates by 3.9% next April.
Hammond has come under pressure from business groups that are demanding the £1.1bn increase in England and Wales be stopped, The Sunday Times reported.
Hammond is said to have told colleagues that it is important to maintain business confidence in the government while Brexit negotiations are ongoing.
The British Retail Consortium has welcomed any decision not to increase business rates.
“If this report is true, it would be a step forward,” said business and regulation policy director Tom Ironside.
“Without decisive action from the chancellor in his upcoming Budget, then retailers face a stark £270m leap in their rates bill from April. This would have consequences for retailers’ investment plans, especially for investment in new or refurbished stores in town centres and in less economically viable locations.”
The chancellor is due to deliver the Budget on 22 November.