Tax discrimination is generally considered undesirable and an incoherent concept. It is, however, practiced to promote certain industries. For instance, clean fuel producing has a broader environmental benefit so giving tax breaks in this case may be beneficial.
Tax discrimination has long been used as a practical award scheme to help those industries which have been able to maintain a satisfactory level of productivity. As such, as an incentive it can stimulate competition as well. Paying less tax,is a motivating factor surging competition among rival industries.