I'm not sure if the government is afraid that bitcoin will take over fiat. You will still need to pay taxes in fiat, which will be a portion of every transaction - sale/income/expense. Fiat will have a place in the economy because it's what people trust, regardless of its fundamental flaws.
Yes, as long as you need to pay taxes in fiat, there will always be a need for fiat. But think of a country with a huge trade deficit. If Bitcoin becomes an established international currency, they will be happy to accept bitcoins which can then be used to bridge this deficit. If dollars are welcome in places like Argentina, bitcoin will also find a place.
If the bitcoin takes over the fiat money theres no taxes to be pay with the government they would not give to us what they want. Theres a thing that you can't replace in this world. But using bitcoin in a country like philippines its a great help because bitcoin is the largest exchange rate here at the Philippines.
I guess there will be tax no matter fiat or bitcoin, why? If there is no tax to be paid how are they going to developed their country, altough not fully is for our country but still some of them must corurpt some and if this bitcoin larger they must take the full control of it then a new regulation will be made to prevent something happened
tax are overstimated, they don't need all that money from taxes to build their country, the true is that they use taxes for their shitty comfort, and for their dirty intentions, not to mention increase their salary to a not fair level, the thing about building infrastructure with taxes hold only a tiny true, they are using a great % of that money to do something else
this is why taxes are unfair, they are not transparent at all, and with bitcoin i'll expect more taxes evasion for sure