The principle of equity, where similarly placed persons are taxed similarly, and persons in dissimilar situations, are taxed dissimilarly; The principle of non-retroactivity, where new taxes are not applied retroactively to the detriment of the taxpayer; a The principle of reasonableness, where taxes are not arbitrary; and a The principle of respect for due process rights during tax assessments, tax applications, and any related tax disputes. Philippine tax performance The Philippines has not been able to mobilize the maximum taxation revenues. The country's tax effort (e.9., performance in collecting taxes compared against potential tax revenues) has been low: "the tax-to-GDP ratio slipped persistently from 14.3o/o of GDP in 2006 lo 12.8o/o in 2009." (Manasan, 2011) The decline in the country's tax effort has been attributed, in part, to changes in tax policy, increased tax evasion and changes in the country's economic structure. (Manasan, 2011) Tax leakages remain a critical issue in the Philippines; "tax leakages have generally been associated with non-compliance of taxpayers. Such behavior has been described as an attempt to escape the tax net through tax evasion and avoidance. Simply defined, tax evasion is the act of reducing tax liabilities by illegal or fraudulent means. lt is a violation of the tax law, which makes the taxpayer liable to administrative or legal actions from authorities. Tax avoidance, on the other hand, reduce tax liabilities through legal means like taking advantage of tax rate differentials and 'loopholes' in the tax code." (Vicente, 2006) Tax avoidance includes "non-payment of taxes through agreements with governments, subsidies, loopholes, tax havens, creative accounting practices, transfer-pricing, etc.-which may be legal under national law, but where concerns are raised about whether the tax avoidance harms the government's ability to meet its obligations to provide for fundamental internationally-recognized human rights." (Business and Human Rights Resource Center) lndeed, "Congress passed 38 new tax measures from 1992 to 1998, about twothirds of which had the effect of giving away incentives or raising tax exemptions. Most of these measures were enacted for the purpose of encouraging foreign investments and export manufacturing." (lbon Foundation, 2009) Official estimates of Philippine tax leakages are staggering: (lbon Foundation, 2009) . . "Out of an average of P387 billion potential tax take from individual, corporate and VAT, only twothirds of P260 billion was remitted to the BIR for the period 1998-2002. An average P127 billion per year escaped the BIR's tax net through evasion." "Uncollected taxes (are) highest among corporate taxpayers, averaging P54 billion per year from 1998-2002 or a tax gap of 38%. The average tax leakage from VAT is P41.6 billion or around 30% of the potential tax due." 59