The world’s largest online retailer has warned the British government that an online sales tax (OST) would be disastrous for the nation’s army of small companies.

Amazon’s UK country manager, John Boumphrey, told a Treasury minister during a meeting on Wednesday that a 1% fee would harm the tens of thousands of small and medium-sized enterprises (SMEs) that conduct business on Amazon’s platform.

The remarks were made during a roundtable summit organized by Lucy Frazer, the Treasury’s finance secretary and minister responsible for tax policy.

The meeting, which included executives from ASOS, Currys, eBay, and Just Eat Takeaway, followed the conclusion of a consultation on the possibility of an OST.

According to those who were briefed on the discussion, eBay was among the corporations that warned of the harmful impact a new tax would have on SMBs.

People said that several executives believed an OST would hinder innovation during a period of severe economic difficulties.

Amazon declined to comment on the meeting or provide a statement regarding its stance on an internet tax.

A spokeswoman for the Treasury stated, “We have not yet determined whether to implement an internet sales tax.”

The goal of the current consultation was to examine the design alternatives and economic effects of such a tax, as well as the pro and con arguments.

Before the conference, retail industry executives expressed their belief that the government’s desire to proceed with a new tax and change the decades-old business rates system was waning.

According to industry experts, there is broad consensus among both online and brick-and-mortar storeowners that business rates require urgent and dramatic adjustment.

This Monday, the Retail Jobs Alliance (RJA), a new organization whose members include Kingfisher and Tesco, released statistics indicating that a drop in rates for all retailers would result in tax savings for 197,000 stores across the nation.

Last month, the RJA wrote to the chancellor, Rishi Sunak, to “make the case for an overall drop in business rates for all retail establishments, [which] we are prepared to finance through the introduction of a new online sales tax.”

Gregg’s and Waterstones are also members.