1. I don't think the government will abolish taxes, in every country in the world they would want taxes because it is a source of income.
2. For tax collection, it can be done in a simple way, such as charging the goods purchased by the community, including taxes, vehicle taxes, building land and many more, these are sources of tax to the government.
3.To track who owns the money from BTC, KYC can be done on each government exchange can coordinate with the exchange for easy tracking.