The Presidency announced late on Monday that Moyane was "suspended with immediate effect" pending the institution of disciplinary proceedings.
President Cyril Ramaphosa said Moyane's suspension was in the public interest to restore the credibility of Sars without delay.
Ramaphosa said that developments at the Sars under Moyane's leadership have resulted in a deterioration in public confidence in the institution and in public finances being compromised and that for the sake of the country and the economy, this situation cannot be allowed to continue or to worsen.
Earlier reports said Moyane was initially asked to resign by President Cyril Ramaphosa and when he refused he was suspended with immediate effect.
"We wish to thank Mr Kingon for availing himself to serve Sars and the country in this capacity," said the statement from Treasury.