evidence: Sri Lanka’s taxation has two key burning issues. One is the consistent reduction of tax to GDP ratio 1 over the last three decades, which reached its lowest of 8.4 percent in 2020 (CBSL, 2020). This means, in Sri Lanka the government revenue is extremely low, resulting in persistent budget deficits and adversely affecting the macroeconomic stability (Weerakoon & Hewage, 2017). The second issue is the excessive reliance on indirect tax and low revenue collection from income tax, indicating a serious concern pertaining to the composition of Sri Lanka’s tax revenue (Amirthalingam, 2017). Data 1 [...] Sri Lanka recorded the highest GDP per capita income and reached upper- middle income status for once, the tax to GDP ratio was merely 11.9 percent. [...] Sri Lanka’s tax system is struggling with two key concerns; low tax revenue and excessive reliance on indirect taxes, contributing to an expansion of income inequality. The country needs to raise its tax ratio and such increase needs to be sourced through income tax. In a bid to increase the income tax collection, legislation needs to be amended to increase individual and corporate income tax rates, starting with revising the standard corporate tax rate to 28 percent. This should be accompanied with reintroducing PAYE and other forms of withholding taxes.