Indigenous Fijian-owned companies will not have to pay any corporate taxes from next year.
The Daily Post says the minister of finance, Ratu Jone Kubuabola, has confirmed the exemption but rejects the criticism that the move is racist and discriminatory.
Ratu Jone says such taxation benefits are similar to exemptions given to some sectors of the economy, citing tourism as an example.
He says the disparity between Indo-Fijians and indigenous Fijians is huge and the government has to put in place measures to bridge the gap.
Boardroom control and at least 51 percent of the shareholding of such companies will have to be in the hands of indigenous Fijians to qualify for the exemption.
The measure is part of the Qarase government's Blueprint for Indigenous Development for the next 20 years.