The charges related to alleged fraudulent invoices.
The court was packed with Mpisane’s supporters and a large media contingent.
Mpisane was appearing in connection with the alleged inflating of her business invoices by almost R5m to cut her tax bill.
Speaking outside the court, Mpisane said she and her husband were delighted with the verdict.
She complimented the national director of public prosecutions [NDPP] Mxolisi Nxasana for "taking the right decision".
She also praised her legal team.
"One cannot say that it will end. There has been a misuse of power. The prosecutor suppressed the evidence. She [made] a mockery of the justice system."
Mpisane, who was elegantly dressed and flanked by her husband as she spoke to the media, said an amount of R4.7m was trivial when she had paid tax of more than R157m.
"We should not have been dragged here. We just want peace and want closure. I am not a politician and I am not a public figure."
Prosecutor Arno Rossouw told the Durban Regional Court that the charges against Mpisane had been withdrawn by the NDPP.
National Prosecuting Authority spokesperson Nathi Ncube said the NPA had a strong case but believed the powerful allegations that prosecutor Meera Naidu had suppressed evidence would have rendered the trial unfair.
Asked about the allegations Ncube said: "We view the allegations very seriously. We cannot provide any more information as it is an internal matter and the prosecutor has not been given a chance to explain."
He said as this was a criminal matter Mpisane would have to bear the costs of her legal team and there were no cost implications for the taxpayer.
Earlier in January, the State also withdrew more than 50 charges of fraud, forgery and uttering of a forged document against Mpisane.
She still faces charges in the Pinetown Magistrate's Court, where she stands accused of interfering with a State witness related to the tax fraud case.