SARS and its suspended commissioner Tom Moyane have withdrawn a R12m defamation suit against the tax agency's former spin doctor Adrian Lackay for submission he made in Parliament.
In a statement on Sunday, Lackay said the lawyers for SARS and Moyane gave written notice on Thursday that the civil proceedings are withdrawn.
He said the parties also indicated that they will pay legal costs incurred.
In 2015, Lackay submitted a letter titled "Sars: This is the inside story" to two parliamentary committees in which he alleged that Moyane wilfully misled the country and Parliament.
Lackay denied the existence of a "rogue investigation unit" with a secret account that spied on taxpayers.
This, however, put him on a bad footing with Moyane, who suspended a number of prominent officials for their alleged involvement with the unit.
In its summons, SARS alleged that Lackay had defamed it and Moyane, released information protected by the Tax Administration Act and the Customs and Excise Act unlawfully to Parliament, and that he had breached his oath of confidentiality.
Lackay resigned from SARS in February 2015, after 11 years of service.
In his statement on Sunday, Lackay said: "Regrettably, the parliamentary committees chose not to consider or entertain the substance of my submission. Instead, Dr Dion George, a former DA member of the SCOF, released my letter to the media and SARS and Moyane responded by instituting civil proceedings against me.
"It is also regrettable that many of the concerns outlined in March 2015, regarding SARS and its revenue collection capability, seem to have materialized, as evidence and testimony before the current Nugent Commission of Inquiry into SARS, have shown."