Norfolk Islands Chief Minister, Geoff Gardiner, says the local government will have to make decisions within weeks over how to raise revenue.
A federal parliamentary committee has recommended that Norfolk Islanders start paying tax like mainland Australians.
Mr Gardiner says local people pride themselves on maintaining their autonomy and have also been looking into taxes tailored to suit the community:
"What we have to do is walk through this minefield and work out something acceptable to the people of Norfolk Island and ensure our sustainability. That may mean a cominbation of both, part of the Australian tax regime, part of our own design. It may be that we can manage under our own steam and certainly there is a large percentage of the community here that would want us to do that."
Mr Gardiner is expected to hold talks with the Minister of Territories within the next few weeks.