evidence: Considering the above, the initial focus of the tax reforms was on optimising tax revenue from progressive direct taxes such as personal and corporate income taxes. There has been strong public opinion regarding the personal income taxes in particular. Sri Lanka collects around 0.5% of GDP from personal income taxes (PIT) whereas regional peers collect around 2% of GDP from PIT. The PIT structure was designed on a scientific basis considering the official income and expenditure survey (with estimates adjusted for inflation up to the point of implementation). Accordingly, only the top 20% of Sri Lankan income earners are liable for income tax at a tax-free threshold of Rs. 100,000 per month. To illustrate further, the median income earner of the 10th highest income decile, would pay 5.8% of his or her total monthly income as tax1.