The levy, which will apply to licensed premises permitted to supply alcohol between midnight and 6am, was approved on 18 January and will be introduced on 1 June this year.
British Beer & Pub Association chief executive Brigid Simmonds said the body had always been opposed to late-night levies and had made its views clear to local authorities.
Effect on the vibrant night-time economy
She said: “They [local authorities] need to think carefully about how a late-night levy would affect a vibrant night-time economy and whether partnership with local businesses, such as through a business improvement district (BID), would not be better for residents and local businesses.
“Local pubs are unfairly burdened by the levy, which is effectively a direct tax, even though they are often heavily engaged with several local partnership initiatives that provide effective local solutions to local problems.
“In 2016, we saw Cheltenham Borough Council announce that it will end its levy in favour of a BID.”
Partnership rather than punitive tax
She added: “It is the first council to do so and shows that it understands the need to work in close partnership with local businesses rather than to impose a punitive tax.
“We hope other councils will take note of Cheltenham’s more positive approach.”
The Association of Licensed Multiple Retailers (ALMR) slammed Tower Hamlets Council over its decision and warned it will have a detrimental effect on local businesses.
ALMR chief executive Kate Nicholls said the move was a huge retrograde step for the council and claims local businesses will suffer as a result.