Paying taxes in cash is almost the most important core thing. It's utter violation of basic concepts of fiat currency for that not to be possible. The whole point of cash is that it is legal tender, and it has to be acceptable for taxes. Any country that violates this is really denying the basic concept of cash.
Cash is just the physical representation of a fiat currency. Fiat currencies exist independently of cash.
As long as you can pay your taxes somehow with cash, I fail to see the problem? The tax office doesn't need to accept cash directly. I don't really see the problem if they delegate handling cash to banks or other institutions as long as no one can be denied access to those.
