"The cabinet has unanimously approved the finance minister's recommendation that general secretary for public revenue (Katerina) Savvaidou be removed from her duties," government spokeswoman Olga Gerovassili said.
Savvaidou is under judicial investigation in two separate cases.
She is criticised for giving TV stations more time to pay advertising tax, and for ordering a review of a 78-million-euro (USD 89 million) fine on a company accused of usury.
In a letter to Prime Minister Alexis Tsipras this week, Savvaidou had rejected pressure to resign and said the accusations against her were "baseless".
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A former senior manager at PriceWaterhouseCoopers, Savvaidou is the second tax chief to be sacked in a year.
Her predecessor Haris Theocharis was forced to resign in June 2014, causing a rift in relations between the then conservative government and the country's creditors.
Theocharis reportedly went after issuing tax circulars that hurt the then conservative government ahead of European elections.