The director of Portugal's tax revenue service Antonio Brigas Afonso stepped down on Wednesday over allegations a list of VIP figures were shielded from paying tax.
Afonso, who took office in July 2014, denied the existence of such a list of taxpayers in a statement to local media.
"My resignation is merely intended to protect the tax authorities of the controversy which is outside the scope of personal data protection and of the institutional level of the tax authority," he said in a farewell letter sent to his former colleagues, local media reported.
The move came after the Ministry of Finance asked the inspector-general of finances to open an investigation into the existence of the list on Monday.
The country's attorney general also said he was looking into whether the alleged list exists and would consider going forward with necessary procedures, Portuguese newspaper Diario Economico reported.
The Ministry of Finance approved Afonso's resignation on Wednesday and highlighted a list of VIP taxpayers had never existed.
The Union of Tax Workers praised Afonso for resigning, with Paulo Ralha, director of the syndicate, pointing out that Afonso "should not be blamed for the controversy surrounding a VIP taxpayers list" in a live interview on national broadcaster TSF.
Afonso's resignation has added further fuel to the controversy regarding Prime Minister Pedro Passos Coelho, who earlier this month admitted he had evaded tax for five years between 1999 and 2004.
Reacting to the resignation of Afonso, Passos Coelho approved of his move.
"I think he (Afonso) did well in having tendered his resignation because the government would never allow a list of that nature or a procedure of that nature to exist at the tax authority," he told journalists in the city of Loule in Algarve, according to Portuguese News Agency Lusa.
"I think it is timely for the director general to have taken that responsibility, because it was he who informed the government that those procedures did not exist," he added.