There is a difference between secrecy and privacy. Governments don't always distinguish between the two but a private transaction doesn't mean Alice and Bob cannot or short not report their taxes and pay their taxes. It simply means no unauthorized party should be allowed to eavesdrop on their transactions.

The tax agency has a legal responsibility to know certain information and people have the legal responsibility to file/report that information to those authorities. Just because transactions are private it does not mean that they cannot be verifiable and that taxes can't be paid.