Cape Town - SARS commissioner Tom Moyane has been suspended with immediate effect on Monday.
"I can confirm that the president has informed Mr Tom Moyane of his suspension with immediate effect,"President Cyril Ramaphosa's spokesperson Khusela Diko told News24.
"This is pending the institution of disciplinary proceedings against him."
Details of the disciplinary are not available yet.
"What the president did say though, and he will issue a statement shortly, is that he did say that he believes it is in the public interest that we restore the credibility of SARS without delay," she said.
READ: SARS decries 'attack' on Moyane, urges Ramaphosa to fast track inquiry
A statement released by the Presidency on Monday night said that Ramaphosa told Moyane in a letter: "Developments at the SARS under your leadership have resulted in a deterioration in public confidence in the institution and in public finances being compromised. For the sake of the country and the economy, this situation cannot be allowed to continue, or to worsen."
Diko said concern was raised in particular about the manner in which Moyane handled the matter of Jonas Makwakwa, who resigned last week, "his treatment of the report given to him by the Financial Intelligence Centre, and his failure to immediately report this to the Minister of Finance".
Diko said another concern Ramaphosa raised was the management of VAT refunds, which had brought the SARS into "serious disrepute" and potentially jeopardised the integrity of the SARS as collector of revenue and adversely affected tax morality among tax payers.
"The decision to suspend Mr Moyane follows a meeting in which President Ramaphosa informed Mr Moyane that he had lost confidence in his ability to lead SARS and offered him an opportunity to resign with immediate effect, which Mr Moyane declined."
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Ramaphosa indicated that as SARS Commissioner, Moyane holds a high position of trust in the management of the country’s public finances, and necessary to act "urgently and immediately".
The Minister of Finance will announce the appointment of an Acting Commissioner for SARS.
This comes after the tax agency called on Ramaphosa to fast track the establishment of a commission into its leadership, as it lamented what it called an “ongoing media onslaught” focused on Moyane, Fin24 reported.
Ramaphosa had announced a commission of inquiry into SARS leadership during his State of the Nation Address in mid-February.
READ: SARS denies Moyane acted unlawfully in Gupta VAT repayments
Moyane has been under the media spotlight recently for his role in handling millions of rands in VAT refunds to a Gupta-linked company via a third party.
On Friday afternoon, the revenue service released a statement arguing that Moyane's actions had been consistent with the law, and the refund was above board.
SARS argued that Moyane did not decide whether the payments should be made or not, also denying that Moyane had ever instructed any SARS employee to deal with the Oakbay complaint in one way or another.