The Northern Ireland Retail Consortium (NIRC) has warned against introducing new tax designed to hit large retailers.
A consultation is currently ongoing into plans put forward by finance minister Sammy Wilson who has called for firms like Asda and Tesco to pay more to ease the pressure on smaller indigenous firms.
But the NIRC has said the plan could end up doing more harm than good, according to a report by the Belfast Telegraph.
The body claims there is no guarantee that small businesses would benefit, and it believes that retail growth and job creation could be put at risk.
Consortium director Jane Bevis said: "Town centres do need reinvigoration and investment, but the proposed large retailer levy is a blunt instrument which would do more harm than good.
"Enabling the creation of business improvement districts instead would allow retailers to get directly involved with specific initiatives."
