Preheat the oven to 350°F (175°C). Grease and flour two 9-inch round cake pans or line them with parchment paper.

In a mixing bowl, whisk together the flour, baking powder, and salt. Set aside.

In another large bowl, cream the softened butter and granulated sugar until light and fluffy.

Beat in the eggs, one at a time, followed by the vanilla extract.

Alternate adding the dry ingredients and coconut milk to the butter mixture. Mix well until combined, then fold in the shredded coconut.

Divide the batter evenly between the prepared cake pans and smooth the tops.

Bake for 25-30 minutes or until a toothpick inserted into the center comes out clean. Allow the cakes to cool in the pans for 10 minutes before transferring them to wire racks to cool completely.

Once cooled, frost the cake with your favorite cream cheese frosting and sprinkle toasted coconut on top. Slice, serve, and savor!