The main source of tax revenue, the phosphate industry, ended in 1979. Other taxes have brought meager returns, except for a copra export tax, with producers protected by a government stabilization fund. The Revenue Equalization Reserve Fund decreased from A $658 million at the end of 2000 to A $635 million at the end of 2001. This is equivalent to 10 years of imports or 8.2 times GDP.
A progressive income tax, introduced in 1975, is set at 25% of gross income above US $1,233 and increases in two steps to 35% on gross incomes over US $34,393. Companies are taxed 25% of net profits of the first US $34,393 and 35% on any net profits over this amount. The hotel tax is a flat rate of 10% of turnover. Withholding tax on dividends paid to overseas investors (except Australians) is 30%; withholding tax on dividends paid to Australians is 15%. Island councils levy local rates; a landowners' tax is based on land area and fertility.