Tesco chief executive Dave Lewis has urged a tax on products sold online to prevent bricks-and-mortar retailers being destroyed by etail competitors.

Lewis told the Mail on Sunday that Chancellor Philip Hammond should levy a 2% charge – a so-called ‘Amazon tax’ amounting to £1.25bn – on goods sold online.

He made his intervention at a time of dramatic change on the high street, characterised by company collapses and restructurings.

Lewis said traditional retailers are burdened by rising costs, taxes and wages as well as facing competition from online rivals.

He argued that the money raised should be used to provide a tax break for retailers, which employ 4.2 million people.

The Tesco chief’s call followed Hammond’s idea of a digital services tax, which Lewis said was “completely separate” from his proposal.

Lewis told the newspaper: “The tax burden has reached the point where companies are going bust. Has the Government thought through what happens when retail starts to decline and if the job losses start to become significant?”

He said his proposal could be used to cut business rates across retail by 20%.

Lewis maintained: “If I were the Chancellor I’d be saying ‘how do I keep this industry going so I could keep this [tax] take for longer, because if I’m not careful I’m going to kill it’.

“Retail is truly national. If you look at gross Value Added Tax, direct tax, indirect taxes, employment, the number of suppliers to our stores and our business, the contribution in terms of the wider community – the role of retail in the economy is significant and it will be affected by this.”