evidence: Sri Lanka has the capacity to tax a larger proportion of its population than India and other South Asian countries do. Information on income deciles for employees is valuable in determining the appropriate income group to include within the tax threshold. However, acquiring this data for Sri Lanka is currently challenging. With an average employee share of 58%, Sri Lanka could potentially levy income tax on the top 30% of its population. Sri Lanka’s exemption thresholds have anyway been closer to this level in the past. [...] Sri Lanka has one of the lowest global tax-to-GDP ratios, with personal income tax collection being notably low and decreasing as income increases. This pattern is in stark contrast to the increasing trends observed in other countries. Consequently, enhancing personal income tax revenue collection is crucial for Sri Lanka. To address this challenge, the Government has recently raised income tax rates and lowered the tax-free income threshold.