A new tax threshold has been created for high earners in Scotland, meaning anyone who earns more than £75,000 will pay a rate of 45%.
Scotland already had the highest tax band in the UK at 47% for people earning more than £125,000.
This will also rise by 1% next year to 48%.
The move was announced by deputy first minister and finance secretary Shona Robison as she unveiled her first Scottish budget in a statement at Holyrood on Tuesday.
In other areas of tax, the three lowest rates will see no increase to their rates while the starter and basic rate bands will increase by the level of inflation.
The changes have been designed to help plug a £1.5bn black hole in the country’s finances.
The Scottish government will fully fund its proposed council tax freeze, providing local government with the equivalent of a 5% rise.
Councils will also be provided with £1.5m to wipe out school meal debt incurred by pupils across Scotland.
Ms Robison said the move would remove a “worry hanging over families up and down the country who are struggling to make ends meet”.
Addressing MSPs, Ms Robison said funding for NHS boards will rise by £550m, or 4.3%. She said the uplift was “above real terms” and would amount to £13.2bn.
“This investment will help the NHS continue to evolve its delivery of services and work to improve waiting times,” she added.
Business rates for premises valued at less than £51,000 will be frozen, while hospitality businesses in Scotland’s islands will be given 100% relief.