20/09/2013 09:55 BST | Updated 20/09/2013 09:59 BST

Theo Paphitis Urges Action To Save 'Ticking Time Bomb' High Streets

Dragons Den star Theo Paphitis speaks at the launch of the Smarta website in central London.

Theo Paphitis has called for a 2% sales tax to be imposed on shopkeepers and online retailers in order to save British high streets.

The ex-Dragons' Den star said that the sales tax should replace business rates, a tax on commercial property units, which he described as "no longer fit for purpose". Business rates are set to collect £7 billion from shops this year.

Paphitis told the Evening Standard: "What we have here is a ticking time bomb. We have to address the issue sharpish.”

The Ryman stationers' boss intervention comes amid concerns that the success of online retailers like Amazon are driving local stores out of business.

In July, Topshop owner Sir Philip Green said that business rates needed to be changed in order to create a "level playing field" with online retailers.

Paphitis' comments received support from fellow Dragons' Den star Duncan Bannatyne. The health club mogul wrote on Twitter: "I fully back @TheoPaphitis on this".