because they don't know how to demand taxes from this, and still fear for the economy of the country
They also fear that people would really put all their money to bitcoin not on the bank. As they cannot touch bitcoin they would probably banned this. Since it is a decentralized organization and government can't really touch them all they have to do is banned them. I'm afraid when it comes to our country as well.
In case of paper money there are different types of tax which are implemented on money of the people like withholding tax, sale tax or other taxes but in case of bit coin it was a fear that the people will keep all their money in the shape of bit coin so their banks will stop working.
I have to pay taxes in my country if i want to cash out my bitcoins it is not that bad for me because if you cash out a huge amount it does not seem like anything when you pay the taxes form it and it is not only the taxes.
Because some of them used it in illegal activities and its easy of use for criminal purposes like transaction by bitcoin is highly anonymous so bitcoin can become a tool for crimes like money laundering, drug trafficking, tax evasion, illegal payment and many more.
The blockchain from my very own perspective is rather transparent, all the transaction can be traced by simply using blockchain explorer, many people also said that bitcoin is not anonymous, so why still bothering with this matter. The government if they found a case that some criminals use bitcoin as the method for them to move their funds, could simply taking advantage of the already existed bitcoin blockchain explorer, so that's not the right reason you mentioned.