The Scottish Government's budget for next year has passed a final vote at Holyrood.
The 2018/19 tax and spending plans were backed by 70 votes to 56.
Finance Secretary Derek Mackay said the budget would bring about £1.2 billion of additional spending to invest "in a fairer Scotland".
Opposition parties argued the plans were not ambitious enough.
The budget includes major changes to Scotland's income tax rates and bands, which will see higher earners pay more and lower earners pay less.
The new five-band system, which was approved in a separate vote on Tuesday, creates a 19p "starter" rate for lower earners and a 21p "intermediate" rate for earnings of more than £24,000.
The higher and additional rates will also be increased to 41p and 46p respectively.
The minority SNP government made a deal with the Scottish Greens last month to ensure its proposals were passed.
The arrangement included an additional £159.5 million for Scottish councils and an extension of the public sector pay rise.
A further £10.5 million of extra funding for Northern Isles ferry services also ensured the backing of Liberal Democrat islands MSPs Liam McArthur and Tavish Scott.
The budget also includes an extra £400 million for the NHS and £179 million to reduce the attainment gap in schools.
Mr Mackay said the tax rises were being done "in a fair and proportionate way which will deliver hundreds of millions more for the public services of Scotland".
"This budget is about investing in a fairer Scotland. Yes there is divergence from the UK, our investments mean students don't pay tuition fees, those who are ill don't pay prescription charges, our citizens aren't vulnerable to the Bedroom Tax," he added.
"And I'm proud to represent the only government in the UK to lift the public sector pay cap and offer a real pay rise to public sector staff."
Conservative finance spokesman Murdo Fraser said the SNP had broken a manifesto promise not to increase the basic rate of income tax.
"And while taxes are going up services are being cut," he said.
"This is a budget which should have put growing the economy first. It should have been a budget for growth. Instead it is a budget for cuts in public services and higher taxes."
Labour had argued for greater tax rises for top earners, pushing for a 50p top rate to be introduced.
The party's finance spokesman James Kelly said: "The reality is that we need bold and radical action in order to address the issues that we face across the country.
"This is a budget that fails to address the scandal of child poverty and cuts to public services. This is a budget that lets people down."
Lib Dem leader Willie Rennie described the budget as "a missed opportunity" in areas such as education and mental health.
"The budget should be investing £500 million in education - in nurseries, in schools and in colleges.
"Not just for the sake of education but for the sake of our economy as well."
Greens co-convener Patrick Harvie said his party had secured a "real terms increase in the funding coming from the Scottish Government to local government", describing it as "an important step forward".
However he also called for progress on reforms to local taxation before next year's budget.