The chief executive of Marks & Spencer (M&S) has criticised the government’s planned Online Sales Tax, suggesting it would “stifle” innovation in the physical retail space.

In an article published by The Mail on Sunday, M&S boss Steve Rowe said that even though the retailer is “often the flagbearer for traditional retail”, he is not in support of the tax.

“If an online sales tax is applied in its broadest sense, hard pressed consumers will shoulder a further tax on even essential items such as prescriptions, baby items and food staples,” wrote Rowe. “At any time this would be regressive but introducing this at the moment would be morally bankrupt.”

A consultation exploring the introduction of an e-commerce tax was concluded last week.

The government says that the proposed tax could help rebalance the taxation of the retail sector between online and in-store retail.

“However, I fear, far from 'rebalancing' the cost burden of business rates to the online players, its introduction would stifle the very innovation physical retail needs to compete in a digitalised era,” said the M&S chief exec.

He said that another tax on an “overburdened sector” was “not the answer”, suggesting that this would not attract people back to shops.

Instead, he claims it is the role of retailers to innovate and invest and the job of the government to “ensure a level playing field and to make sure the regulatory environment doesn't make that harder”.

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