I have been thinking of this for long and the reason being that a lot of bitcoin transaction is going online everyday in many countries and i think government can generate IGR from this if possible. I am not a programmer and i have a little knowledge about bitcoin technologies but i just want to know if it is possible.
I think it is impossible to tax bitcoins. But taxing fiat money out from bitcoins (trading bitcoins to fiat money) is indeed possible. The government may count this as income and may place an income tax on it. Unless they impose a law to tax cryptocurrency-fiat conversion by a certain percentage.