Humza Yousaf is set to announce a new tax band for higher earners despite warnings from business leaders that it risks "disincentivising investment in Scotland".
In a letter to the First Minister that was signed by Aberdeen & Grampian Chamber of Commerce and the Scottish Chambers of Commerce - among others - the government was warned against making Scotland "less competitive".
It read: "We urge the Scottish government to avoid measures in the budget that may make Scotland less competitive, particularly in relation to any decisions on income tax rates and thresholds.
"We are concerned that further divergence with the rest of the UK will reduce the spending power of Scottish consumers, damage business confidence, remove money from the real economy, disincentivise investment in Scotland and inhibit our ability to create jobs and attract and retain the talent our economy and society needs."
Black hole worse than expected
It was previously thought the the Scottish Government would be looking to plug a black hole of up to £1billion.
However, The Times revealed that the financial hole is half a billion pounds worse than that with Holyrood expected to find funds to plug a black hole worth around £1.5billion.
Reports suggest a number of tense debates have been held between the First Minister and his cabinet as they look to find the funds to solve the problem ahead of the budget next Wednesday.
A further income tax band, potentially a 45% levy on earnings between £75,000 and £125,140, was proposed by the Scottish Trades Union Congress which, they claim, would raise an additional £93m.
However, the Fraser of Allander Institute believes it would only recoup around £39m due to people changing their behaviour to limit the tax they pay.
Anyone earning around £28,000 already pays more taxes in Scotland than they would south of the border.
Employees on medium salaries of around £43,500 to £50,000 pay 42% income tax in Scotland compared to just 20% in England.
The new tax band would now mean head teachers, consultants and senior police officers would see the tax gap with their counterparts in England increase to more than £3,000.