If there is a country where cryptocurrency is legal how much is the tax that we have to pay to the government? Also, how can the government track our transactions?
There are lot of countries that Bitcoin is declared legal and Bitcoin taxes will depend upon the regulation that imposed by every government as there are countries that declared Bitcoin is free of tax like France and Japan. Here are the link for your reference of Bitcoin status on every country.
https://en.m.wikipedia.org/wiki/Legality_of_bitcoin_by_country_or_territory