Of course it can be taxed, if a citizen that use bitcoin want to declare his revenue from it, it will be taxed like any other fiat money. Taxing directly bitcoin is a bit more difficult for the government if their citizens are not willing to help by declaring their income per year.
Taxing the ownership of Bitcoin may be challenging to implement. Usually, the best way is to tax the capital gains out of owning Bitcoin or any cryptocurrency for that matter. When a Bitcoin holder decides to encash or convert his holding into cash then the difference when he bought it and when he sold the same will be subjected to tax.
However, it can also be possible to implement some sort of a sales tax applicable when a person is buying Bitcoin and usually can be collected by the seller or the exchange. The government has to always remember that there is a certain level when tax can be effective and beyond that level some people can be sorting into hidden ways to deal with Bitcoin. The only upside with taxation is that the government has no choice but to recognize that something which it plans to taxed for.