Here in my country which is now an upcoming tiger economy (though we are still classified as a third-world country), we are free to participate in Bitcoin both buying and selling as the government is treating Bitcoin just like any other foreiign money.
However, I am sure that only a very, very small fraction of us are declaring our Bitcoin income. It seems to me that the government is not that interested to get strict with individuals as long as they can tax the Bitcoin exchange provider for the service rendered.
I am then wondering the situation with other countries. Can your government really be able to track if you never declared gains made from Bitcoin transactions?
Its bit hard to be tracked as bitcoin transaction is very less. I need to salute your government that they don't care about individuals as long as they pay tax to the bitcoin exchange provider for the service they rent. Its the freedom given by the government. This is the reason behind your country is upcoming rapidly in economy. An educated and an experience leader knows how should get best without affecting citizens.