MANILA, July 15 (Reuters) - The Philippines' new government filed its first tax evasion case on Thursday to launch its campaign to shore up shaky revenues and cut the budget deficit by cracking down on corruption and enforcing tax collection laws.
The government, which took office on June 30, also appointed a new head for peace talks with Muslim separatists in the south of the country to try to resolve a long-running insurgency.
Finance officials went to the justice department on Thursday to file tax evasion charges against a pawnshop owner who they said paid only 25,600 pesos ($550) in income tax between 1998 and 2009, but was able to buy a 26 million peso sports car.
"We would like to inform the paying public that it's no longer business as usual and chances of being caught is higher," Finance Secretary Cesar Purisima told reporters.
"There will be no compromise under this programme."
Justice Secretary Leila de Lima said she was reviewing tax cases referred by the finance department, pointing to a list she said had names of 16 individuals and corporations.
The Philippines had a tax collection rate of 12.8 percent of its gross domestic product (GDP), lower than the regional average of 16 percent, the finance minister said.
"From that, it's obvious that we're losing roughly 3 percent of our GDP," Purisima said, putting lost tax revenues at about $5 billion a year.
The government last week raised the forecast for this year's budget deficit to 325 billion pesos ($7 billion). As a percentage of GDP the deficit was expected to be 3.9 percent, level with 2009, and Purisima has said that will be cut to 2 percent over three years.
Purisima said criminal cases would be filed against major smugglers next week. The government was also looking into whether banks had any liability in tax evasion cases, and would also weed out corrupt state workers, he said.
"On this particular case that we filed, obviously that would take a long time, but on the minds that we can influence, the hearts that we create fear, I think you'll see an increase in revenues. That's what we're hoping," Purisima added.
He also appealed to the public to report tax cheats and smugglers, calling on "underpaid" secretaries to turn in bosses who did not issue receipts and pay the right amount of taxes.
Separately, President Benigno Aquino III named Marvic Leonen, dean of the College of Law at the University of the Philippines, as the government's chief negotiator in peace talks with the country's largest Muslim separatist group.
The separatist Moro Islamic Liberation Front (MILF), which has been seeking a separate homeland in the south of the mainly Roman Catholic country, welcomed the appointment of Leonen, an expert on indigenous people's rights and ancestral domain issues.
Aquino wants to end the conflict on resource-rich Mindanao island to help lure foreign investment to develop deposits of metals, oil and gas, and spokesman Edwin Lacierda said the president expected the talks to resume soon. ($1 = 46.4 pesos) (Editing by John Mair and Sugita Katyal)
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