The decision was made at an executive meeting this week following a public consultation held in June where only six people objected to the proposed increase.
The new charges will be effective from midnight on September 30.
Councillor Laura Murtagh said: “This went out to public consultation in June.
“I would like to highlight that it has been five years since since taxi tariffs have increased.
“Taxi drivers do not have to enforce the fare increase but it will allow them a wage rise.”
Starting fees will go up by 50p and the distance charge will rise by ten per cent meaning customers will pay 10p per 90 yards.
Councillor Robert Bissett said: “I think this is overdue and I think we should support the report.”
The meeting heard that although there has been a decrease in average car insurance costs in recent months, the current average cost is still 14 per cent higher than in 2016 when the last review concluded.
Councillor David Alexander said: “We have to look at the ratio of cabs per head of the population. I think taxi fares need to increase to allow drivers to make a living. This is a very good start.”