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?
Yes the laws are not that strictly implemented right now. In fact in many countries, the laws are being made but their implementation is not upto the mark!!
But yes when the implementation is made strong, maybe the systems are made and being executed, the government will be able to track the never declared gains because the proper records will be made!