Sustainable Economic Growth and Land Management: A Case Study on the Role of Tax Legislation in Emerging Markets

Academic Editors: Wei Liu, Le Yin, Xi Chu and Jinyan Zhan Received: 3 November 2024 Revised: 6 December 2024 Accepted: 23 December 2024 Published: 27 December 2024 Citation: Quispe-Espinoza, E.P.; Barzola-Inga, S.L.; Adauto-Justo, C.A.; Borja-Mucha, C.S.; Moreno-Menéndez, F.M.; Gutiérrez-Meza, F.P.; Silva-Murillo, J.M.; González-Prida, V. Sustainable Economic Growth and Land Management: A Case Study on the Role of Tax Legislation in Emerging Markets. Land 2025,14, 30. https://doi.org/10.3390/ land14010030 Copyright: © 2024 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https://creativecommons.org/ licenses/by/4.0/). Article Sustainable Economic Growth and Land Management: A Case Study on the Role of Tax Legislation in Emerging Markets Edith Pilar Quispe-Espinoza 1, Sonia Luz Barzola-Inga 1, Carlos Antonio Adauto-Justo 1, Carlos Samuel Borja-Mucha 1, Fabricio Miguel Moreno-Menéndez 1, Fredi Paul Gutiérrez-Meza 1, Jefrin Marlon Silva-Murillo 1and Vicente González-Prida 2,* 1 Faculty of Administrative and Accounting Sciences, Universidad Peruana Los Andes, Huancayo 12000, Peru; [email protected] (E.P.Q.-E.); [email protected] (S.L.B.-I.); [email protected] (C.A.A.-J.); [email protected] (C.S.B.-M.); [email protected] (F.M.M.-M.); [email protected] (F.P.G.-M.); [email protected] (J.M.S.-M.) 2Department of Industrial Management I, University of Seville, 41092 Sevilla, Spain *Correspondence: [email protected] Abstract: The purpose of this study is to examine how tax incentives resulting from the so-called Amazon Law (Law No. 27037) affect smalland medium-sized agro-industrial producers (SMEAPs) in the Junín and Huánuco regions in Peru. This research fills a void that relates to the exclusion of these producers regarding the Law’s incentives that aim to encourage investment in the Amazon. In this study, the research design was nonexperimental, and since the data were descriptive–correlational in nature, a structured questionnaire with a Likert scale was used to gauge participants’ opinions about economic progress and tax benefits. The survey participants included 72 co-operatives drawn from a population of 88, and their awareness and use of tax incentives were targeted. SPSS and similar statistical analysis tools were used and showed that there was a positive correlation between tax benefits and economic development, with a correlation coefficient of 0.873, indicating a strong relationship. However, most co-operatives ranked the benefits only as average or poor, with 34.72% rating them as regular and 31.94% as poor. This study indicates that the present laws do not provide these producers with sufficient opportunities for development. The authors suggest that changes to the Law are required to improve the inclusion of smalland medium-sized agricultural producers so that proposals for improvements in their economic development and management of the agricultural lands in the Amazon region can be promoted. Keywords: Amazon Law; economic development; small and medium enterprises (SMEs); tax benefits; agricultural co-operatives; sustainable land management 1. Introduction The agricultural sector is crucial for Peru’s economic development, especially in the rural areas of the highlands and jungle, where it contributes significantly to economic growth and poverty reduction. However, it faces challenges such as a lack of education and access to basic infrastructure among farmers, which limits their productivity. These problems are due to inefficient farming practices, limited use of technology, and inadequate resource management. Despite these difficulties, farmers involved in smalland mediumsized operations have started to organise themselves in associative models, improving their participation in national and international markets. However, legal and tax policies Land 2025,14, 30 https://doi.org/10.3390/land14010030 Land 2025,14, 30 2 of 35 require adjustments to support their competitiveness and growth [ 1 ]. Agriculture in Peru is classified into four types: subsistence, small rural businesses, commercial agriculture performed by smalland medium-sized associated producers, and intensive agro-exports by large companies. Commercial agriculture performed by small and medium producers is key to economic development, especially in the context of the tax benefits of the Law for the Promotion of Investment in the Amazon. The IV National Agricultural Census of 2012 did indicate (as a whole) that there were 2,213,506 agricultural units in the country. However, it must be stated that a substantial part of the land remains unproductive and unutilised. Precisely, of the total geographical area used for agriculture, which is 7,125,007 hectares, only 4,166,678 hectares, which is 58.3%, is under cultivation. Of the total land size, therefore, 41.7% or 2,969,329 hectares are not used for cultivation. This contributes to the view that there can be enhanced opportunities in the expansion of agricultural production and the rational utilisation of the land, hence enhancing the economic development of agriculture. The majority of producers are natural persons, which underlines the importance of smalland medium-sized producers [ 2 ]. The agricultural sector showed considerable improvement, growing by 9% in July from the previous year’s corresponding period. This growth was driven largely by the recovery in the agricultural subsector’s large inputs from crops such as blueberries, rice, coffee, yellow corn, and potatoes. This is a positive signal which testifies to the fact that the sector is capable of coming through all the previous difficulties and arriving back to the previous levels of growth. Additionally, agro-exports were valued at USD 5488 million, consolidating the sector’s position as the country’s second-largest foreign exchange earner. The Multiannual Sectoral Strategic Plan of the Ministry of Agriculture highlights the importance of the agricultural sector, which employs 28% of the population. In addition, the agricultural sector alone generates about 7.5% of the national Gross Domestic Product (GDP). This figure shows the extent of the contribution of the sector, signifying its usefulness in the economy as a generator of employment and income and being supportive of the rural lifestyle. This share is evidence that the sector plays a vital role in the overall economy of the nation [3]. Junín and Huánuco are some of the regions included under the Amazon Law (Law No. 27037), which seeks to promote sustainable development through incentives that come in the form of tax exemptions for investment. However, it reduces the number of smalland medium-sized agricultural producers in associations because of high access standards. This limitation is against the principles of the Law of promoting balanced development in regional economic activities. Producers in Junín and Huánuco have been unable to attain adequate volumes of production to qualify for better prices and, therefore, group themselves under co-operatives. However, according to the regulations of Law 3, paragraph j, they cannot obtain a significant enough supply for better pricing. The regulation of Law No. 27037 (Supreme Decree 103-99-EF) regarding the requirements for benefit eligibility states that “Manufacturing activities related to the processing, transformation of primary products and commercialisation . . . can only be carried out by the producer himself”. Therefore, this regulation is restrictive and does not contemplate or provide tax benefits to the companies that group together the associated agricultural producers, given that when they deliver their harvests or products to the companies under the legal status of co-operatives (who acquire them through a purchase settlement) for the tax body, this act constitutes a transaction between two different persons—the small or medium agricultural producer and the associated company/co-operative. For the small or medium agricultural producers who have the aim of offering significant volumes to the national and international market and have become associated with co-operatives for the commercialisation of their crops or products, this is a restrictive interpretation that deprives them of tax benefits; consequently, economic development has not been achieved for the latter (small and Land 2025,14, 30 3 of 35 medium agricultural producers), who are marginalised from the tax benefits, and the spirit of the Amazon Law does not contribute to the sustainable development of the Junín and Huánuco regions. As a result of this exclusion, economic development in the region has not reached the levels foreseen by the Law, limiting its impact on the well-being of producers and not contributing to the integral development of Junín and Huánuco, thus distorting the original purpose of the Amazon Law. If the current situation persists, organised smalland medium-sized agricultural producers will continue to be economically marginalised because they will not be able to access the tax benefits of the Amazon Law. This exclusion contradicts both the producers’ right to equitable treatment and the fiscal or governmental policy oriented towards social inclusion, affecting the economic growth and sustainability of agricultural producers’ associations or rural communities in the regions of Junín and Huánuco [ 4 ]. To correct this inequity and achieve a positive impact on the economic development of small and medium agricultural producers in Junín and Huánuco, several alternatives are identified. These include the following: A1. Establish the relationship between the tax benefit of the Amazon Law (VC1) and the economic development of organised small and medium producers (VC2), assessing how access to these benefits could transform their competitiveness and sustainability in the market. A2. Propose reforms to the tax regulations of the Amazon Law that would allow smalland medium-sized agricultural producers to form associations, such as co-operatives, groups, or committees, in order to benefit from the tax benefits. This measure seeks to optimise the impact of the Amazon Law and the integral economic development of the region. The general problem is to determine the relationship between the tax benefit granted by the Amazon Law (VC1) and the economic development of small and medium associated agrarian producers (VC2) in the regions of Junín and Huánuco during the year 2017 [ 5 ]. To develop the general problem, the following specific problems are identified as research questions, each of which explores the relationship between the correlational variable of tax benefit (VC1) and different dimensions of local economic development (D1, D2, D3, and D4): RQ1.How does the Amazon Law’s tax benefit relate to the structural development (D1VC2) of small and medium agricultural producers in Junín and Huánuco in 2017? RQ2. How does the Amazon Law’s tax benefit impact the economic development (D2VC2) of small and medium agricultural producers in Junín and Huánuco in 2017? RQ3. How does the Amazon Law’s tax benefit affect the socio-cultural development (D3VC2) of small and medium agricultural producers in Junín and Huánuco in 2017? RQ4. How does the Amazon Law’s tax benefit influence the political and administrative development (D4VC2) of small and medium agricultural producers in Junín and Huánuco in 2017? For the above, the general objective of this research was to establish the relationship between the tax benefit of the Amazon Law (VC1) and the economic development of small and medium associated agrarian producers (VC2) in the regions of Junín and Huánuco in 2017. To achieve the general objective, the following specific objectives were defined, which relate the correlational variable of the tax benefit (VC1) to the different dimensions of local economic development: O1. Assess the relationship between the Amazon Law’s tax benefit (VC1) and the structural development (D1VC2) of small and medium agricultural producers in Junín and Huánuco in 2017. Land 2025,14, 30 4 of 35 O2. Evaluate the impact of the Amazon Law’s tax benefit (VC1) on the economic development (D2VC2) of small and medium agricultural producers in Junín and Huánuco in 2017. O3. Analyse the effect of the Amazon Law’s tax benefit (VC1) on the socio-cultural development (D3VC2) of small and medium agricultural producers in Junín and Huánuco in 2017. O4. Investigate the influence of the Amazon Law’s tax benefit (VC1) on the political and administrative development (D4VC2) of small and medium agricultural producers in Junín and Huánuco in 2017. This research is crucial, as it comprehensively addresses an analysis of the Amazon Law, focusing on the tax benefits granted to taxpayers in the Amazon region. The present study seeks to expand current knowledge based on the examined regulatory provisions. It also compares their effects on the economic status of smalland medium-sized agricultural producers in association. In addition, it aims to evaluate current legislation and apply contemporary theoretical approaches to the formulation of tax regulations, offering a detailed view of the legal framework and its relationship with the beneficiaries. Methodologically, the research focuses on establishing a clear regulatory framework that facilitates the access of these producers to the tax benefit regime, proposing improvements in Amazonian tax policy to boost economic development and investment. The results obtained are intended to scientifically support the implementation of policies that benefit these producers, contributing to regional growth and the competitiveness of the agricultural sector [ 3 , 5 ]. In a complex economic context, it is essential to establish clear tax regulations for the development of businesses, both for natural and legal persons. Although Law No. 27037 has ambitious objectives, its effectiveness has been limited by varying interpretations and limited applicability. This research seeks to facilitate collaboration between legislators and agricultural institutions to optimise legislation and ensure the consistent application of tax benefits, maximising the economic impact in favour of smalland medium-sized producers. As socio-economic disparities affect different economic agents, it is imperative to design fiscal policies that reduce these inequalities and generate equitable opportunities for growth. This research will contribute to building an inclusive tax system that responds to Peru’s socio-economic realities, especially for smalland medium-sized agricultural producers organised in associations. By not including them adequately in the benefits regime of the Amazon Law, an exclusion is generated that contradicts the principles of equity and social inclusion promoted by the government [4]. The development of this research is convenient, as it promotes the economic and social growth of the Amazon, facilitating investment in companies in the region through a tax regime adapted to their needs. This will favour business growth and sustainable progress in this strategic area of the country, consequently leading to economic development. Ultimately, the importance of this research lies in its ability to inform legislative reforms that allow for an equitable distribution of tax benefits and incentives, creating a reference framework for other similar projects and orienting fiscal policy towards sustainable and equitable economic development in the Amazon region [ 6 ]. The ecological consequences of a policy encouraging industrial agriculture must, therefore, be considered a major issue. As a result of industrial cultivation, there is excessive use of natural products, land deforestation, and excessive loss of plant and animal species. However, one should not ignore the fact that the growing requirement for higher productivity has led to the degradation of the environment in most agricultural sectors. That is why stimulating industrial agriculture should include measures that prevent or at least minimise further degradation of resources and ecosystems. This includes sustainable agriculture, the efficient use of resources, and environmentalism in agriculture policies. Land 2025,14, 30 5 of 35 The geographical scope of the research focuses on the provinces of Chanchamayo and Satipo in the Junín region and the province of Huánuco in the region of the same name, selected for their relevance in agricultural activity and the potential impact of tax benefits on their local economies. The study population includes smalland medium-sized agricultural producers operating under associative structures, such as co-operatives and associations, including both natural and legal persons with relevant knowledge of tax legislation [ 7 ]. The study is structured starting with the description and formulation of the problem, objectives, justification, importance, and delimitation of the research. The international, national, and local backgrounds are analysed, as well as the theoretical, historical, and legal foundations of the Amazon Law. The conceptual framework, hypotheses, and operationalisation of the variables are also developed. The methodology includes the selection of the population and samples; the data collection instruments; and the validation, procedures, and statistical analysis for hypothesis testing. The findings are presented in tables, differentiating between the dimensions of tax benefit and economic development, followed by a discussion and an interpretation of the results. In addition, an analysis of the current regulations and a simulation of income tax liquidation under the Amazon Law is carried out, comparing these with adjusted regulations to observe the effects of tax benefits (Appendix C). Finally, conclusions and recommendations derived from the analysis are presented, along with annexes that complement the research. In summary, the study proposes a reconceptualisation of tax policy oriented to the Amazon region of Peru, promoting legislative reform for the equitable and sustainable development of smalland medium-sized agricultural producers. 2. Research Review The international research reviewed herein highlights the key role of tax benefits in economic growth and sectoral development in various regions, underlining how tax incentives become a key mechanism for promoting investment, competitiveness, and tax equity. In [ 8 ], waste management was valorised by using by-products such as biogas and compost to promote recycling and the circular economy in the Canary Islands, overcoming territorial disparities and promoting the circular economy. On the other hand, digital transformation in Canary Island tourism enterprises faces challenges from a shift in visitor preferences and business culture, requiring destination support for resilience [ 9 ]. Another approach is that in [ 10 ], where it was found that provincial tax agencies in Spain are less efficient due to factors such as a net property tax base, population density, and delegated municipality inhabitants, and setting up self-governing agencies does not improve efficiency levels. In this sense, Spanish regional governments exercise their tax autonomy responsibly, with some having exhausted current subcentral tax possibilities while others still have ample fiscal space [ 11 ]. Additionally, the authors of [ 12 ] developed a manual at the University of Medellín aimed at individuals in Ecuador to optimise income tax returns through the appropriate use of tax benefits. The research shows that, due to the complexity of tax regulations, taxpayers do not take full advantage of tax incentives, thus limiting their function of reducing the tax burden and stimulating strategic sectors. Recent studies highlight that tax exemptions can play a crucial role in fostering the development of the tourism sector and in reducing investment leakage to other regions. Furthermore, they emphasise the need for effective public–private partnerships, which are essential to optimise the benefits of tax policies and improve the quality of life in local communities. The implementation of fiscal incentives is seen as a strategy to attract tourism investments, thus creating a solid basis for regional development [ 13 ]. As an example, it is noted that the development of tourism infrastructure in the areas that influence the national parks in Spain has a signif- Land 2025,14, 30 6 of 35 icant impact on the local economy. Tax exemptions can be a key mechanism to finance these infrastructures, which improves the tourism offer and increases the attractiveness of the destination for visitors [ 14 ]. The importance of a common vision towards sustainable tourism is evident. Fiscal policies should be aligned with sustainability objectives, allowing the tourism sector not only to expand but also contribute to the conservation of the natural and cultural environment [ 15 ]. Other studies include specific case studies on the use of natural and cultural resources in tourism, illustrating how fiscal incentives can be effectively applied to enhance these areas and maximise positive economic impact in less developed regions [ 16 ]. There are also several relevant references that address the need to create a tax incentive control model that supports business development without compromising income tax collection. These studies highlight the importance of establishing control and sanction mechanisms to ensure fairness in taxation and prevent tax avoidance, ensuring that tax incentives generate real benefits for the economy. For example, the authors [ 17 ] examined how tax reduction policies can boost economic development and social equity. However, they also warned that these reductions can threaten fiscal sustainability if they are not implemented with adequate monitoring. Similarly, the authors of [ 18 ] discussed how a more rigorous tax collection mechanism can encourage technological innovation in firms, suggesting that improved fiscal management is crucial for sustainable and balanced development. Similarly, the authors of [ 19 ] investigated how direct taxation affects economic growth and stressed the need for a tax system that not only promotes business growth but also maintains equity in tax collection. These references reflect the need for a robust framework to monitor tax incentives and ensure that tax benefits translate into meaningful improvements for the economy. This research is crucial because it presents legislative actions for overweighing considerations for equal treatment in terms of tax benefits and incentives to encourage authorised economic agents in the Amazônia Macroregion and increase income and economic growth. The findings serve as a theoretical basis for assessing how tax benefits can influence the development of specific sectors and the structuring of fiscal policies in regions such as the Peruvian Amazon. The Peruvian context is specially approached by some of the points that concern the effect of taxation and incentives in Peru. For instance, the authors of [ 1 – 6 ] offered a perspective on the analysis of the economic trends in Peru, including issues of the structuration of the rural region, the functions of agricultural exportation, and the possibility of agroforestry concession in the Amazonian area. These references established the distinctiveness of the conditions and prospects for developing the agricultural sector in Peru, along with the imperative role of such fiscal policies to involve sustainable development and equity in the Amazon area. For this reason, these studies help advance an understanding of the context of Peru in terms of socio-economic and environmental environments and whether tax incentives can help the country develop an inclusive framework for reducing inequality. The national research reviewed provides a comprehensive overview of the effects of the Law for the Promotion of Investment in the Amazon (Law No. 27037), especially in the Amazonian regions of Peru, where the tax benefits granted were expected to foster economic and social development. However, the studies show both the successes and limitations of this legislation. The authors of [ 20 ] examined how the Amazon Law has impacted the Huanuco region. Their analysis revealed that the multiple tax benefits, far from incentivising productive investment, have weakened the tax system and reduced revenue collection, generating problems of evasion and smuggling in sectors such as fuel. The authors concluded that the Law has not fulfilled its regional development objective and that, instead, it has boosted the profits of large traders, promoting evasive practices and affecting business formalisation. In [ 21 ], a preliminary assessment of tax benefits in the Amazon is carried out. By using a regression discontinuity approach, the study found Land 2025,14, 30 7 of 35 that tax incentives can benefit in terms of employment and income but raises doubts about their long-term effectiveness. It pointed out that the fiscal costs of the law call for an urgent review to determine whether the benefits justify public investment and whether they truly improve the welfare of the population in the Amazon region. The authors of [ 22 ] examined the effects of the Amazon Law in Loreto and concluded that tax incentives have not achieved the desired economic impacts due to the weakness of the regulatory framework. The research warns that distortions in the region’s tax structure have favoured tax evasion and that tax measures are not sufficient to promote sustained economic growth, underlining the need to improve collection systems. Regarding the crucial aspects of the impact of taxes and tax incentives on the performance of smalland medium-sized enterprises (SMEs), we have ref. [ 23 ], which examines the relationship between the payment of taxes and the performance of SMEs in several EU countries. By using a longitudinal analysis, the authors found that a well-managed tax burden can positively influence the sustainability and growth of these firms while highlighting the importance of balanced tax policies that promote competitiveness without compromising revenue collection. Furthermore, the authors of [ 24 ] investigated the role of tax incentives in supporting SME performance in a changing economic environment. They argue that well-designed incentives not only help firms to survive in times of crisis but also encourage innovation and development. However, they stress the need for a more strategic approach to the implementation of these policies in order to maximise their benefits. In that vein, the authors of [ 25 ] focused on management practices in SMEs from the perspective of open innovation. They identified common problems faced by these enterprises and suggested innovative solutions to improve their management and sustainability. This approach highlights the importance of adapting management strategies to the particularities of SMEs, promoting an environment conducive to innovation and growth. Taken together, these studies emphasise the relevance of effective fiscal policies and adaptive management practices for the sustainable development of smalland medium-sized enterprises. The Peruvian Amazon Research Institute (IIAP) has also contributed to the study of the Amazon region, publishing two important documents in 2009. In ref. [ 26 ], the IIAP defines a vision of sustainable development based on four dimensions (human, economic, environmental, and political), oriented towards the efficient management of natural resources. The study proposes improving the capacities of local populations and promoting a sustainable economy, supported by decentralisation and the integration of the Amazon into the global context. On the other hand, in ref. [ 27 ], the IIAP proposes the need to establish a sustainable development policy that takes into account both the biophysical and socio-cultural particularities of the region. This document proposes the promotion of strategic sectors through the creation of productive clusters and the development of basic infrastructure and adapted technology. It also emphasises the importance of a legal framework that allows for the active participation of local communities in development processes, as well as the protection of ecosystems and biodiversity. Among the recommendations of the IIAP is the highlighted need to develop integrated sectoral policies and promote the Amazon in international treaties in order to enhance its global positioning. However, the research also identifies some limitations, including the inability of the tax incentives under the current law to generate the desired side economic benefits in the region owing to inadequacies in the legal framework that have promoted economic inefficiencies, as illustrated by tax avoidance and evasion. Land 2025,14, 30 8 of 35 3. Materials and Methods 3.1. Scientific and Regulatory Framework In the context of the Peruvian Amazon, the Law for the Promotion of Investment in the Amazon (Law No. 27037) [ 28 ] is framed within a constitutional backing that promotes agrarian development and the reduction of socio-economic inequalities. This Law was designed to attract investment, improve infrastructure, and promote growth in key sectors of the Amazon, underlining the State’s commitment to sustainable and equitable development in the region. The need for a special tax regime for the Amazon was discussed in the Congress of the Republic of Peru, which led to the enactment of the Law with the objective of implementing tax benefits that would boost economic activity and improve the quality of life of the region’s inhabitants. This approach seeks not only to promote economic development but also to ensure sustainable and equitable growth in the Peruvian Amazon. In summary, the scientific research and the rationale for tax legislation in the Amazon are interconnected in their aim to promote comprehensive and sustainable development, taking into account the particularities and needs of the region. The regulatory framework governing agricultural activity in Peru, including in the Amazon, is essential for the sustainable development of the sector. The 1993 Political Constitution of Peru establishes (in Article 68) the obligation of the State to promote the conservation of biological diversity and protected natural areas, and in Article 69, the sustainable development of the Amazon with adequate legislation. Furthermore, Article 88 supports preferentially agrarian development and guarantees the right to land ownership. Law No. 27037, known as the Law for the Promotion of Investment in the Amazon, is crucial for attracting investment to this region. Approved in 1998, it seeks to promote the sustainable and integral development of the Amazon by establishing conditions for public and private investment. This Law offers tax benefits, such as reduced income tax rates for companies located in the Amazon that are engaged in economic activities linked to the region. On the other hand, Law No. 29972 promotes the inclusion of agricultural producers through co-operatives, facilitating access to economic benefits and improving their bargaining power and competitiveness in the market. This legislation encourages association and collaborative work, which are key elements for sustainable rural development. In conclusion, the regulatory framework in Peru favours both the conservation of natural resources and the sustainable development of the Amazon and the agricultural sector in general, promoting responsible agricultural practices and the inclusion of producers in a context of economy of scale. 3.2. On the Tax Benefit Tax benefits in Peru, as in many other countries, are tools designed to promote economic and social development by reducing tax obligations for certain taxpayers [ 29 , 30 ]. According to the Peruvian Institute of Economics [ 31 ], these benefits include exemptions, deductions, and special treatments that seek to promote regional development, the promotion of economic sectors, employment generation, and investment. However, these benefits can decrease collection efficiency and increase collection costs. In other words, “collection efficiency” is the productivity with which a government or a tax authority can collect taxes from the taxpayers. It refers to reducing the difference between the taxes that are legal to be collected and those actually received. High collection efficiency indicates that the State achieves its objective of bringing more people in its tax bracket to pay their taxes as required without avoiding or evading payments. Essentially, while tax benefits are meant to encourage economic and social advancement, a disadvantage arises in that they decrease collection efficiency by extending the array of the tax system, enhancing its lack of Land 2025,14, 30 9 of 35 collection and ease of enforcement and a concomitant increase in the administrative burden. The Constitutional Court of Peru, in STC 0042-2004-AI, describes tax benefits as regulations that reduce or postpone tax obligations, with the objective of reducing the tax base or the nominal rate. These benefits take the form of incentives, exemptions, exonerations, tax credits, and tax exemptions, and their objective is to totally or partially waive the payment of taxes. In the context of smalland medium-sized agricultural producers, tax benefits, through regulations such as reduced rates, can provide incentives for investment and economic development. According to the Ministry of Economy and Finance [ 32 ], tax expenditures encompass benefits in all national taxes and are grouped into categories such as the elimination of tax payments and a reduction in the effective rate [ 33 ]. Therefore, we consider that the tax benefit is initially a tax expenditure according to not collecting taxes, or in other words, the tax benefit is seen as a tax expenditure because it involves forgoing tax revenue that would otherwise be collected. However, in the end, it sees a potential taxpayer being fully taxed, and there will be more tax revenue. In conclusion, although tax benefits in Peru seek to formalise and promote businesses, especially micro and small enterprises, they face challenges such as public distrust and bureaucratic barriers. The Amazon Law, for example, seeks to promote sustainable development but faces limitations in its effective application due to regulatory restrictions. 3.3. On Economic Development Economic development is a complex process involving both quantitative factors and profound qualitative transformations. According to ref. [ 30 ], it is based on efficient and economical production, although this equation has not yet been satisfactorily solved by any system. This concept has evolved historically and is projected into the future as a desired vision, varying from a perspective centred on economic growth to one that focuses on people’s outcomes [ 34 ]. Economic growth, although related to development, refers specifically to the increase in certain economic magnitudes, such as national income and output, and is considered a more reliable indicator and less subject to ideological interpretations. Legal certainty is crucial for economic development, as it is linked to trust, which is essential for investment and, thus, for economic and social development. Legal certainty implies certainty, legality, hierarchy, the publicity of norms, and the prohibition of arbitrariness, thus promoting justice and equality [ 35 ]. According to ref. [ 35 ], in order to attract investment, especially foreign investment, it is essential to have a legal and institutional framework that guarantees legal certainty, which includes regulatory development, the actions of public authorities, and the administration of justice. Ref. [ 36 ] defines economic development as a process that moves a country from a subordinate economic position to a developed one, emphasising the importance of industrialisation and agricultural technification as key to the growth of living standards. In this context, it is essential to seek legal regulatory certainty that allows for the implementation of clear and enforceable rules, thus facilitating socio-economic development. According to ref. [ 37 ], the author reflects that “ . . . every community is settled and circumscribed in a territory, the territory is not only a geographical and administrative space, it is also a physical and symbolic place where social relations of complementarity, competition, conflict and group life emerge; this space is subject to structural, technological and economic transformations; that is to say, when focusing on economic development, local development must be previously focused on which is nothing more than an integrated territorially based system in which the dimensions . . . interrelate and need each other” [ 37 ]. Therefore, in order to have global economic development, we must first work on local economic development (LED). Development thinking has evolved from the 18th century “classical school of economics”, moving from a vision focused on economic growth to approaches that value dimensions beyond the quantitative. The Land 2025,14, 30 16 of 35 Table 5. Total explained variance of the tax benefit questionnaire. Component Initial Eigenvalues Sums of Squared Extraction Charges Total % Variance % Accumulate Total % Variance % Accumulate 1 9.119 65.134 65.134 9.119 65.134 65.134 2 1.024 7.312 72.446 1.024 7.312 72.446 3 0.947 6.762 79.208 4 0.588 4.198 83.406 5 0.515 3.680 87.086 6 0.388 2.769 89.854 7 0.319 2.278 92.132 8 0.281 2.004 94.136 9 0.228 1.628 95.765 10 0.196 1.396 97.161 11 0.134 0.957 98.118 12 0.111 0.792 98.910 13 0.090 0.641 99.551 14 0.063 0.449 100.000 Extraction method: principal component analysis. Table 6. Total explained variance of the economic development questionnaire. Component Initial Eigenvalues Sums of Squared Extraction Charges Total % Variance % Accumulate Total % Variance % Accumulate 1 8.570 57.136 57.136 8.570 57.136 57.136 2 1.434 9.557 66.694 1.434 9.557 66.694 3 1.216 8.108 74.801 1.216 8.108 74.801 4 0.782 5.214 80.015 5 0.540 3.603 83.618 6 0.503 3.353 86.971 7 0.425 2.836 89.806 8 0.308 2.051 91.857 9 0.279 1.860 93.717 10 0.256 1.705 95.422 11 0.199 1.326 96.748 12 0.193 1.284 98.032 13 0.153 1.018 99.050 14 0.117 0.780 99.830 15 0.025 0.170 100.000 Extraction method: principal component analysis. Data collection is a structured process that involves several essential steps to answer the research objectives and test the research hypotheses. These steps include being clear about the objectives and hypothesised variables; selecting the population or sample; defining and validating data collection techniques; and collecting data for further processing, description, analysis, and discussion. Regarding data processing and analysis, the authors of [ 47 ] stated that this process transforms dispersed and disordered data into grouped and ordered results, which are analysed according to the research objectives and hypotheses. For this purpose, statistical tools were used with the support of programmes such as SPSS 24 and Excel 2016. The data processing was carried out by using a data processing centre (DPC), where the necessary resources were concentrated and documented in a database. The results obtained through the different analysis and interpretation procedures, as well as the process of the verification and validation of the hypotheses put forward, are presented below. These results make it possible to achieve the objectives proposed in the study. In the descriptive analysis, tables were drawn up to represent the variables and dimensions Land 2025,14, 30 17 of 35 studied. This approach facilitates an understanding of the data collected through the questionnaire, which is the main research instrument used. In the inferential analysis, Spearman’s rho statistic was used to determine the association between the variables, and the t-test was used to assess the significance of Spearman’s correlation. This approach allows for the testing of the hypotheses formulated in the research. In addition, a factor analysis was carried out to verify the hypothesised constructs of the instruments used. The descriptive and inferential statistical aspects are based on the methodologies in [ 48 ], using the IBM SPSS Statistics 24 statistical programme. This analysis is detailed in the following section, where the results of the variables derived from the survey are presented and the hypotheses are tested, carrying out specific analyses for interpretation and decision making. The results obtained through descriptive and inferential analysis are fundamental to validate the hypotheses put forward and to achieve the research objectives. The use of appropriate statistical tools, together with a rigorous methodological approach, ensures that the results are accurate and useful for the interpretation of the phenomena studied. 4. Results For data analysis, a survey based on a Likert scale was used, which allows attitudes to be measured in terms of favourability and unfavorability, thus constituting an ordinal scale from 1 (“never” or “very bad”) to 5 (“always” or “excellent”), which classifies the relative positions between objects or individuals, and for the Likert scale applied, a final scale per attribute was made, as will be seen in the following sections. 4.1. Evaluation of Tax Benefit Perceptions Among Co-Operatives In the results of variable 1, specifically in the tax benefits table, it is observed that of the 72 co-operatives surveyed, 33.33% consider the tax benefit to be fair, 29.17% rate it as bad, 19.44% as good, 13.89% as excellent, and 4.17% as very bad. These results suggest that tax benefits in co-operatives need to improve from bad and very bad to fair, good, or excellent (Table 7). Table 7. Correlational for Variable 1. Categories Frequency Percentage Cumulative Percentage Excellent 10 13.89 13.89 Good 14 19.44 33.33 Regular 24 33.33 66.67 Bad 21 29.17 95.83 Very bad 3 4.17 100.00 Total 72 100.00 100.00 Source: Survey applied to the study sample. In the dimension evaluating the elimination of tax payments, 30.56% of the cooperatives consider this form of tax benefit to be bad, 27.78% rate it as fair, 23.61% as good, 13.89% as excellent, and 4.17% as very bad. This indicates that tax benefits in this area also require improvement (Table 8). Regarding the dimension of recovering the amount paid, 31.94% of the co-operatives consider it fair, 26.39% bad, 25.00% good, 11.11% excellent, and 5.56% very bad. Again, it is concluded that there is a need to improve tax benefits in this area (Table 9). Land 2025,14, 30 18 of 35 Table 8. Dimension 1: VC1. Eliminate the payment of taxes. Categories Frequency Percentage Cumulative Percentage Excellent 10 13.89 13.89 Good 17 23.61 37.50 Regular 20 27.78 65.28 Bad 22 30.56 95.83 Very bad 3 4.17 100.00 Total 72 100.00 100.00 Source: Survey applied to the study sample. Table 9. Dimension 2: VC1. Enable recovery of the amount paid. Categories Frequency Percentage Cumulative Percentage Excellent 8 11.11 11.11 Good 18 25.00 36.11 Regular 23 31.94 68.06 Bad 19 26.39 94.44 Very bad 4 5.56 100.00 Total 72 100.00 100.00 Source: Survey applied to the study sample. In the dimension that reduces the effective rate, 43.06% of co-operatives rate it as fair, 22.22% as good, 20.83% as poor, and 13.89% as excellent. These results suggest that tax benefits in this dimension should be improved (Table 10). Table 10. Dimension 3: VC1. Reduce the effective rate. Categories Frequency Percentage Cumulative Percentage Excellent 10 13.89 13.89 Good 16 22.22 36.11 Regular 31 43.06 79.17 Bad 15 20.83 100.00 Very bad 0 0.00 100.00 Total 72 100.00 100.00 Source: Survey applied to the study sample. Regarding the dimension of delaying tax payment, 41.67% of the co-operatives consider it fair, 26.39% bad, 25.00% good, 19.44% bad, and 1.39% excellent. This indicates that tax benefits in this area also need improvement (Table 11). Table 11. Dimension 4: VC1. Delay payment of tax. Categories Frequency Percentage Cumulative Percentage Excellent 1 1.39 1.39 Good 18 25.00 26.39 Regular 30 41.67 68.06 Bad 14 19.44 87.50 Very bad 9 12.50 100.00 Total 72 100.00 100.00 Source: Survey applied to the study sample. Finally, in the dimension of simplified regimes, 41.67% of the co-operatives consider it excellent, 31.94% good, 23.61% fair, and 2.78% bad. These results highlight the need to promote the applicability of special and simplified regimes for members and the cooperative itself, according to the Amazon Law (Table 12). Land 2025,14, 30 19 of 35 Table 12. Dimension 5: VC1. Simplified regimes. Categories Frequency Percentage Cumulative Percentage Excellent 30 41.67 41.67 Good 23 31.94 73.61 Regular 17 23.61 97.22 Bad 2 2.78 100.00 Very bad 0 0.00 100.00 Total 72 100.00 100.00 Source: Survey applied to the study sample. 4.2. Assessment of Economic Development Ratings in Co-Operatives The results of correlational variable 2, specifically in the economic development table, show that of the 72 co-operatives surveyed, 34.72% consider their economic development to be fair, 31.94% rate it as poor, 20.83% as good, 8.33% as very poor, and 4.17% as excellent. These results suggest that economic development in the co-operatives needs to improve from bad and very bad to fair, good, or excellent (Table 13). Table 13. Correlational variable 2. Economic development. Categories Frequency Percentage Cumulative Percentage Excellent 3 4.17 4.17 Good 15 20.83 25.00 Regular 25 34.72 59.72 Bad 23 31.94 91.67 Very bad 6 8.33 100.00 Total 72 100.00 100.00 Source: Survey applied to the study sample. In the dimension of the structure of local economic development, 41.67% of the cooperatives consider it excellent, 33.33% good, 13.89% fair, and 11.11% poor. This indicates that, although there is a positive perception in this area, there is still room for improvement, especially in the poor and fair categories (Table 14). Table 14. Dimension 1: VC2. Local economic development/Structure. Categories Frequency Percentage Cumulative Percentage Excellent 30 41.67 41.67 Good 24 33.33 75.00 Regular 10 13.89 88.89 Bad 8 11.11 100.00 Very bad 0 0.00 100.00 Total 72 100.00 100.00 Source: Survey applied to the study sample. Regarding the economic dimension of local economic development, 52.78% of the co-operatives rate it as good, 20.83% as fair, 11.11% as bad, 9.72% as excellent, and 5.56% as very bad. These results suggest that, although the majority have a positive perception, there is a need to improve the areas rated as bad and very bad (Table 15). In the socio-cultural dimension of local economic development, 48.61% of the cooperatives consider it fair, 27.78% good, 16.67% bad, 5.56% excellent, and 1.39% very bad. This indicates that there is a significant need for improvement in this area, especially in the poor and very poor categories (Table 16). Land 2025,14, 30 20 of 35 Table 15. Dimension 2: VC2. Local economic development/Economic. Categories Frequency Percentage Cumulative Percentage Excellent 7 9.72 9.72 Good 38 52.78 62.50 Regular 15 20.83 83.33 Bad 8 11.11 94.44 Very bad 4 5.56 100.00 Total 72 100.00 100.00 Source: Survey applied to the study sample. Table 16. Dimension 3: VC2. Local economic development/Socio-cultural. Categories Frequency Percentage Cumulative Percentage Excellent 4 5.56 5.56 Good 20 27.78 33.33 Regular 35 48.61 81.94 Bad 12 16.67 98.61 Very bad 1 1.39 100.00 Total 72 100.00 100.00 Source: Survey applied to the study sample. Finally, in the political and administrative dimension of local economic development, 38.89% of the co-operatives rate it as bad, 30.56% as good, 16.67% as excellent, 12.50% as fair, and 1.39% as very bad. These results highlight the need to improve legal stability and State support to foster business growth (Table 17). Table 17. Dimension 4: VC2. Local economic development/Political and administrative. Categories Frequency Percentage Cumulative Percentage Excellent 12 16.67 16.67 Good 22 30.56 47.22 Regular 9 12.50 59.72 Bad 28 38.89 98.61 Very bad 1 1.39 100.00 Total 72 100.00 100.00 Source: Survey applied to the study sample. An analysis of the tax benefits and perception of the development of the economy among the co-operatives was carried out, and the results show that the performance is somewhat intermediate with great potential improvement of the various indices. While some co-operatives highly appreciate such factors as tax benefits and measures of economic development, many consider them to be quite reasonable or even insufficient. The areas that require further consideration from the co-operatives’ perspective include the efficiency of the tax incentive framework, the fairness of the tax regime, and improvement in economic and socio-political support for the co-operatives. Technical areas such as simple taxes and local development systems are, again, moderately well regarded; however, it is imperative to underscore that efforts are needed to improve the perceived weaknesses of the sociocultural and political categories. The further development of co-operatives and their role in the process of regional development can only be guaranteed through the enhancement of co-operation with the institutions, as well as the adoption of favourable legislation. In summary, co-operatives should seek to maintain and improve their relationships with institutions and initiatives that provide them with legal stability, and the State should facilitate their business growth through timely legislation. Furthermore, associations should Land 2025,14, 30 21 of 35 be seen as a key factor for economic development, and their use should be continued and disseminated to more farmers to fulfil their purposes. 4.3. Testing Research Hypotheses The research focuses on the relationship between the tax benefit provided by the Amazon Law and the economic development of small and medium agricultural producers in the regions of Junín and Huánuco during 2017. The general hypothesis formulated states the following: The null hypothesis (H0) is posed as ρ = 0, indicating that “there is no relationship between the tax benefit (VC1) of the Amazon Law and the economic development (VC2) of small and medium agrarian producers”. In contrast, the alternative hypothesis (H1) of ρ > 0 postulates that “there is a significant direct relationship between the tax benefit (VC1) of the Amazon Law and the economic development (VC2) of small and medium agricultural producers”. The significance level used in this study was 0.05 (5%), which was selected to establish the risk of rejecting the null hypothesis when, in fact, it should be accepted. This level is commonly adopted in social science research and is appropriate for descriptive correlational design. For the analysis of the variables, several statistics were applied, including Kendall’s coefficient for dichotomous nominal variables, as well as Pearson’s and Spearman’s coefficients for nominal and ordinal variables, respectively. To determine statistical significance, Student’s t-test was applied. The incidence coefficient was calculated using Spearman’s rho: ρ=1−6∑D2 N(N2−1) The calculation was made using the statistical package SPSS Version 24, where the results were the existence of a significant direct relationship between the tax benefit (VC1) of the Amazon Law and the economic development (VC2) of small and medium agricultural producers associated with the Junín and Huánuco regions in 2017 (Table 18). Table 18. Correlations for the general hypothesis. VC1 VC2 Spearman’s rho VC1 Correlation coefficient 1.000 0.873 ** Sig. (bilateral) 0.000 N 72 72 VC2 Correlation coefficient 0.873 ** 1.000 Sig. (bilateral) 0.000 . N 72 72 ** Correlation is significant at the 0.01 level (bilateral). Source: Own elaboration. That is, two comparison columns were generated, representing each of the study variables. The correlation obtained between the tax benefit (VC1) and economic development (VC2) showed a coefficient of 0.873, which is classified as a very high correlation according to the table of Spearman’s rho values. The hypothesis testing was evaluated using a two-tailed approach, establishing a critical value of t = ± 1.96 for α = 0.05. The significant correlation remained at the 0.01 level, suggesting a robust relationship between the variables. The formula for calculating the test statistic resulted in a calculated t-value of 14.98, which is higher than the critical value, indicating that the null hypothesis (H0) is rejected in favour of the alternative hypothesis (H1). That is, from the expression t=ρ p(1−ρ2)/(n−2) Land 2025,14, 30 22 of 35 the t-value was obtained by substituting in the values as follows: t=0.873 r1−(0.873)2/(72 −2) =14.98 An interpretation of the results reveals that a Spearman’s rho of 0.873 is statistically significant (p< 0.05), implying a true correlation with a 5% probability of error [ 44 ]. This result suggests that as tax benefits improve, there is also a significant improvement in the economic development of agricultural co-operatives. Therefore, it is concluded that there is a direct and positive relationship between the two variables, evidencing the impact that tax policies can have on improving economic development in rural contexts; this is in line with the objectives of land use management and sustainable development in research in the field of industrial organisation and business management. 4.4. Specific Hypotheses This section addresses the formulation and evaluation of specific hypotheses related to the non-influence of the tax benefit provided by the Amazon Law on the local economic development of smalland medium-sized agricultural producers in the regions of Junín and Huánuco during 2017. The null hypothesis (H0: rho = 0) postulates that there is no significant relationship between the tax benefit (VC1) and local economic development in terms of structure (D1VC2). In contrast, the alternative hypothesis (H1: rho > 0) argues that there is a significant direct relationship between the two variables. To determine the significance of the results, a significance level of alpha = 0.05 was set. The Spearman’s rho statistic was used as a measure of correlation, and the decision rule states the rejection of the null hypothesis if t > 1.96 or t < − 1.96. The results revealed a correlation coefficient of 0.688 between VC1 and D1VC2, with a bilateral significance level of 0.000, indicating a high and significant correlation at the 0.01 level (bilateral). Consequently, Student’s t-value was calculated, resulting in a t-value of 7.93. Since this value exceeds the critical value of t = 1.96, the null hypothesis H0 is rejected and H1 is accepted, concluding that there is a significant direct relationship between the tax benefit and local economic development in terms of structure (Table 19). There is a significant direct relationship between the tax benefit (VC1) of the Amazon Law and the local economic development/structure (D1VC2) of small and medium associated agrarian producers in the Junín and Huánuco regions in 2017. Table 19. Correlations specific to Hypothesis 1. VC1 VC2 Spearman’s rho VC1 Correlation coefficient 1.000 0.688 ** Sig. (bilateral) . 0.000 N 72 72 D1VC2 Correlation coefficient 0.688 ** 1.000 Sig. (bilateral) 0.000 . N 72 72 ** Correlation is significant at the 0.01 level (bilateral). Source: Own elaboration. Further analysis of the significance of the results shows that a Spearman coefficient of 0.688 suggests a real correlation with a 5% probability of error, indicating that the higher the tax benefit is, the more significant the improvement in the local economic development structure of the co-operatives. This finding is relevant to land management practices that seek to optimise ecosystem services in rural contexts, as explored in governance and spatial planning initiatives. Land 2025,14, 30 23 of 35 In the following analysis, the null hypothesis (H0: rho = 0) is posited with respect to the relationship between the tax benefit (VC1) and local economic development in terms of the economy (D2VC2). In this case, the alternative hypothesis (H1: rho > 0) also postulates a significant direct relationship. As in the previous analysis, a significance level of alpha = 0.05 was maintained, and Spearman’s rho statistic was used to assess the correlation. The results of the correlation between VC1 and D2VC2 showed a coefficient of 0.701 with a significance level of 0.000, which also indicates a high and significant correlation at the 0.01 level (bilateral). The calculated t-value was 8.22, which also exceeds the critical value of 1.96, leading to the rejection of H0 and the acceptance of H1. This suggests that an increase in tax benefits is significantly correlated with local economic development in terms of the economy (Table 20). There is a significant direct relationship between the tax benefit (VC1) of the Amazon Law and the local economic development/economy (D2VC2) of small and medium associated agrarian producers in the Junín and Huánuco regions in 2017. Table 20. Correlations specific to Hypothesis 2. VC1 VC2 Spearman’s rho VC1 Correlation coefficient 1.000 0.701 ** Sig. (bilateral) . 0.000 N 72 72 D2VC2 Correlation coefficient 0.701 ** 1.000 Sig. (bilateral) 0.000 . N 72 72 ** Correlation is significant at the 0.01 level (bilateral). Source: Own elaboration. An interpretation of the results reveals that the Spearman coefficient of 0.701 represents a correlation of 70.10%, indicating that the tax benefit is positively related to local economic development. As tax benefits increase, a significant improvement in the economics of co-operatives is observed, which is relevant for understanding changes in land use and functions in rural contexts. In the following analysis, the null hypothesis (H0: rho = 0) is formulated to assess the relationship between the tax benefit (VC1) and local economic development in the socio-cultural domain (D3VC2). Again, the alternative hypothesis (H1: rho > 0) implies the existence of a significant relationship. The significance level of alpha = 0.05 was maintained, and Spearman’s rho statistic was used. The results showed a correlation coefficient of 0.793 between VC1 and D3VC2, with a significance level of 0.000, indicating a high correlation that is significant at the 0.01 level. The t-statistic calculation resulted in 10.89, which is also higher than 1.96, leading to the rejection of H0 and acceptance of H1. This result indicates that the tax benefit has a positive and significant influence on local economic development in the socio-cultural aspect (Table 21). There is a significant direct relationship between the tax benefit (VC1) of the Amazon Law and the local economic development/socio-cultural aspects (D3VC2) of small and medium associated agrarian producers in the Junín and Huánuco regions in 2017. Table 21. Correlations specific to Hypothesis 3. VC1 VC2 Spearman’s rho VC1 Correlation coefficient 1.000 0.793 ** Sig. (bilateral) 0.000 N 72 72 D3VC2 Correlation coefficient 0.793 ** 1.000 Sig. (bilateral) 0.000 . N 72 72 ** Correlation is significant at the 0.01 level (bilateral). Source: Own elaboration. Land 2025,14, 30 24 of 35 Further analysis revealed that a Spearman coefficient of 0.793 denotes a correlation of 79.30%. This suggests that the tax benefit is positively related to the socio-cultural development of co-operatives, implying that improved tax benefits result in significant development in this area, highlighting the importance of policies that foster social and cultural cohesion in rural communities. Finally, the null hypothesis (H0: rho = 0) is posed in relation to local economic development in terms of policy and administration (D4VC2). The alternative hypothesis (H1: rho > 0) also applies here. By maintaining the significance level of alpha at 0.05 and using Spearman’s rho statistic, the results reveal a correlation coefficient of 0.798 between VC1 and D4VC2, with a significance level of 0.000. The calculated t-value was 11.08, which exceeds the critical threshold of 1.96, resulting in the rejection of the null hypothesis H0 and the acceptance of H1. This finding highlights that there is a significant direct relationship between tax benefits and local economic development from the political–administrative approach (Table 22). There is a significant direct relationship between the tax benefit (VC1) of the Amazon Law and the local economic development/political and administrative aspects (D4VC2) of small and medium associated agrarian producers in the Junín and Huánuco regions in 2017. Table 22. Correlations specific to Hypothesis 4. VC1 VC2 Spearman’s rho VC1 Correlation coefficient 1.000 0.798 ** Sig. (bilateral) 0.000 N 72 72 D4VC2 Correlation coefficient 0.798 ** 1.000 Sig. (bilateral) 0.000 . N 72 72 ** Correlation is significant at the 0.01 level (bilateral). Source: Own elaboration. An interpretation of these results shows that a Spearman coefficient of 0.798 indicates a correlation of 79.80%. This implies that the tax benefit has a significant positive impact on the policies and management of local economic development in co-operatives. Consequently, the findings emphasise the need to implement management strategies that adequately integrate tax benefits with sustainable development, promoting practices that optimise land use and strengthen administrative capacity in rural communities. The referent examples of co-operatives include small and medium agricultural producers who enter into associations so as to better their lot on production fundamentals. These co-operatives are all about advocating associativity, securing markets, sharing resources, and learning to increase production and efficiency. It is established to work as groups with clear linear production networks, and this makes them distribute their revenue among members, besides embracing the principles of integration and solidarity. However, the current framework of the Amazon Law may actually inadvertently encourage modern colonisation in specific territories and not include these co-operatives enough to optimise their utilisation for the sake of their development. These results not only contribute to the understanding of economic development in rural contexts but also have important implications for the formulation of effective land management policies, highlighting the relevance of an integrated approach that considers both the economic well-being and sustainable development of the communities involved. 5. Discussion The agricultural sector is fundamental to the Peruvian economy, showing increasing dynamism in recent years. This growth has given rise to new actors in rural development, who argue that only large-scale agriculture can drive economic, social, and sustainable Land 2025,14, 30 25 of 35 development. In this context, associated smalland medium-sized agricultural producers have started to form business organisations in extreme and adverse areas, operating as transparent production chains where benefits are shared among their members. Associativity is presented as a means to promote the economic development of these producers, strengthening their management and production capacity. However, Law No. 27037 limits manufacturing activities linked to the processing and commercialisation of primary products, allowing only individual producers to carry them out. This restriction prevents smalland medium-sized associated agricultural producers from taking full advantage of market opportunities. While the Law seeks to promote sustainable development in the Amazon through tax benefits and investment-friendly conditions, it is crucial that it fulfils its essential purpose of generating welfare for the local population. This requires adjusting the Peruvian tax system to reflect the realities of the communities, promoting a consensual regulation that works in conjunction with international tax systems. The State has the responsibility to promote sustainable development in the Amazon through appropriate legal provisions, including the possibility of establishing special tax regimes for different regions, as stipulated in Article 79 of the Political Constitution of Peru. In line with articles 68 ◦ and 69 ◦ , the State is committed to promoting integral and sustainable development in the Amazon region, facilitating investment by all citizens and fostering sustainable economic growth. The consolidation of smalland medium-sized associated agricultural producers is based on the principle that “unity is strength”, allowing small capitals to reduce costs and improve their competitiveness in the markets. Through associativity, the value of collective production exceeds the sum of individual productions, underlining the importance of collaboration in the agricultural sector. Junín and Huánuco are regions in the country that exhibit unique socio-economic and physical characteristics that have a direct bearing on farming and co-operatives. As an area showcased in the study, Junín has diverse elevations. Thus, both highland and valley crops can be grown in the region, including coffee, cocoa, and other crop production. Huánuco is an agricultural territory famous for its fertile lands and for producing foods such as potatoes and corn. The two areas have a well-developed system of co-operation of SME agricultural producers to organise their supply to markets and the acquisition of supplies. Transportation and other infrastructure and climate variability are factors that also contribute to the development of agriculture and the economy in these regions. The adaptation of economic measures and the legal framework is essential to ensure that tax benefits become effective tools to stimulate the growth of the productive apparatus in the Amazon. Tax systems must be adapted to the evolution of economic and social realities so that there must be objective justifications for tax relief in certain sectors; once the objectives are achieved, all activities must be integrated into the general tax system. Ultimately, the tax benefits initially granted to smalland medium-sized agricultural producer members have the potential to promote sustainable development. As these enterprises become stronger, it is expected that they will be able to tax normally, contributing to the well-being of the families, the region, and the State, ensuring positive and sustainable economic development. The research has important implications for the analysis of fiscal policies for poverty reduction and real distributive opportunities in societies. It emphasises the feasibility of having an efficient depth of tax reform according to the socio-realities of Peru, especially for the producers of agricultural products who are grouped under associations of small and middle scale. Therefore, this research limits itself to the provinces of Chanchamayo, Satipo, and Huánuco to understand the effects of tax benefits on the economy and how legislation can help in providing fairness in tax promotions. This research provides a reference framework for similar projects in determining desirable fiscal measures for sustainable and equitable development in the Amazon region. In other words, this study emphasises Land 2025,14, 30 32 of 35 Table A3. Income statement. Concept Amount (PEN) Net Sales 6,287,495 Cost of Sales −4,218,763 Gross Profit 2,068,732 Operating Expenses −1,622,574 Operating Profit 446,158 Financial Expenses −196,542 Taxable Financial Income 274,586 Exceptional Charges −58,674 Profit Before Employee Participation and Tax 465,528 Employee Participation - Profit Before Tax 465,528 (2) Analysis of Additions and Deductions (a) Fines for Infractions: - Amount: PEN 10,540.00; - Deduction: Non-deductible (Art. 44 c) of the Tax Code. (b) Representation Expenses: - Amount: PEN 79,620.00. - Permitted Deduction: 0.5% of gross income: Land 2024, 13, x FOR PEER REVIEW 10 of 36 generation [41]. The success of a community depends on effective strategic planning, and LED is increasingly used to strengthen local economic capacity; improve the investment climate; and increase the productivity and competitiveness of local businesses, entrepreneurs, and workers. An LED strategy should recognise the constraints and opportunities of the informal economy, promoting broad social benefits for all economic and social sectors, both formal and informal, excluded and disadvantaged. Local economic development (LED) is a comprehensive process that seeks to strengthen the capacities of a community, promoting redistribution, solidarity, integration, and inclusion. The social economy, especially the solidarity economy, is crucial for LED, as it is based on principles of co-operativism, economic democracy, and active community participation. This economy manifests itself in forms such as co-operatives, which meet economic and social needs by using a democratic structure. The dimensions of LED include the identification of territorial and population scope, the self-diagnosis of needs, the strengthening of the social fabric, and the creation of infrastructures for endogenous and sustainable development. Furthermore, it is essential to harmonise the political, professional, and community spheres and to promote financial services to encourage entrepreneurship. According to the ECLAC (Economic Commission for Latin America and the Caribbean), the evaluation and monitoring of LED is not only explained by decentralisation but also by complex factors arising from the territories, with the mobilisation of local actors. The criteria for LED action include the development of business services, access to credit for MSEs, and the promotion of associativity and co-operation between enterprises [39]. It is also important to link universities and research centres with local productive systems and to adapt legal frameworks for economic promotion. LED implementation requires a periodic evaluation of relevance, performance, efficiency, and impact [41]. Evaluations are divided into process and outcome evaluations, both of which are necessary to improve and verify the effectiveness of programmes. Assessing the impact of an LED strategy involves separating the direct results of the strategy from those caused by external factors, which can be challenging due to a lack of data or funds. In summary, LED is a complex process that requires the integration of the social economy, active community participation, and rigorous evaluation to ensure its effectiveness and sustainability. 3.4. Methodology The process of obtaining raw data involved several key steps, including stating the research objectives and variables, identifying the study population or sample, and choosing the data collection method. These techniques included questionnaires and document reviews, and approaches such as statistical analysis via SPSS and Excel were used to check the reliability of the results. The methods used in the research are the following: • Data collection techniques: o Surveys (questionnaires using a Likert scale); o Document analysis. • Data processing and analysis: o Use of statistical tools and software (SPSS 24, Excel 2016); o Descriptive and inferential statistical analysis. • Specific steps: o Define the variables and criteria for data organisation; o Input the data into statistical software and generate the results; o Verify and validate the hypotheses. 3.4.1. Hypothesis and System of Variables The general hypothesis postulates that there is a direct and significant relationship between the tax benefit granted by the Amazon Law and the economic development of small and medium associated agrarian producers in the regions of Junín and Huánuco. Net Sales: PEN 6,287,495; Land 2024, 13, x FOR PEER REVIEW 10 of 36 generation [41]. The success of a community depends on effective strategic planning, and LED is increasingly used to strengthen local economic capacity; improve the investment climate; and increase the productivity and competitiveness of local businesses, entrepreneurs, and workers. An LED strategy should recognise the constraints and opportunities of the informal economy, promoting broad social benefits for all economic and social sectors, both formal and informal, excluded and disadvantaged. Local economic development (LED) is a comprehensive process that seeks to strengthen the capacities of a community, promoting redistribution, solidarity, integration, and inclusion. The social economy, especially the solidarity economy, is crucial for LED, as it is based on principles of co-operativism, economic democracy, and active community participation. This economy manifests itself in forms such as co-operatives, which meet economic and social needs by using a democratic structure. The dimensions of LED include the identification of territorial and population scope, the self-diagnosis of needs, the strengthening of the social fabric, and the creation of infrastructures for endogenous and sustainable development. Furthermore, it is essential to harmonise the political, professional, and community spheres and to promote financial services to encourage entrepreneurship. According to the ECLAC (Economic Commission for Latin America and the Caribbean), the evaluation and monitoring of LED is not only explained by decentralisation but also by complex factors arising from the territories, with the mobilisation of local actors. The criteria for LED action include the development of business services, access to credit for MSEs, and the promotion of associativity and co-operation between enterprises [39]. It is also important to link universities and research centres with local productive systems and to adapt legal frameworks for economic promotion. LED implementation requires a periodic evaluation of relevance, performance, efficiency, and impact [41]. Evaluations are divided into process and outcome evaluations, both of which are necessary to improve and verify the effectiveness of programmes. Assessing the impact of an LED strategy involves separating the direct results of the strategy from those caused by external factors, which can be challenging due to a lack of data or funds. In summary, LED is a complex process that requires the integration of the social economy, active community participation, and rigorous evaluation to ensure its effectiveness and sustainability. 3.4. Methodology The process of obtaining raw data involved several key steps, including stating the research objectives and variables, identifying the study population or sample, and choosing the data collection method. These techniques included questionnaires and document reviews, and approaches such as statistical analysis via SPSS and Excel were used to check the reliability of the results. The methods used in the research are the following: • Data collection techniques: o Surveys (questionnaires using a Likert scale); o Document analysis. • Data processing and analysis: o Use of statistical tools and software (SPSS 24, Excel 2016); o Descriptive and inferential statistical analysis. • Specific steps: o Define the variables and criteria for data organisation; o Input the data into statistical software and generate the results; o Verify and validate the hypotheses. 3.4.1. Hypothesis and System of Variables The general hypothesis postulates that there is a direct and significant relationship between the tax benefit granted by the Amazon Law and the economic development of small and medium associated agrarian producers in the regions of Junín and Huánuco. Financial Income: PEN 274,586; Land 2024, 13, x FOR PEER REVIEW 10 of 36 generation [41]. The success of a community depends on effective strategic planning, and LED is increasingly used to strengthen local economic capacity; improve the investment climate; and increase the productivity and competitiveness of local businesses, entrepreneurs, and workers. An LED strategy should recognise the constraints and opportunities of the informal economy, promoting broad social benefits for all economic and social sectors, both formal and informal, excluded and disadvantaged. Local economic development (LED) is a comprehensive process that seeks to strengthen the capacities of a community, promoting redistribution, solidarity, integration, and inclusion. The social economy, especially the solidarity economy, is crucial for LED, as it is based on principles of co-operativism, economic democracy, and active community participation. This economy manifests itself in forms such as co-operatives, which meet economic and social needs by using a democratic structure. The dimensions of LED include the identification of territorial and population scope, the self-diagnosis of needs, the strengthening of the social fabric, and the creation of infrastructures for endogenous and sustainable development. Furthermore, it is essential to harmonise the political, professional, and community spheres and to promote financial services to encourage entrepreneurship. According to the ECLAC (Economic Commission for Latin America and the Caribbean), the evaluation and monitoring of LED is not only explained by decentralisation but also by complex factors arising from the territories, with the mobilisation of local actors. The criteria for LED action include the development of business services, access to credit for MSEs, and the promotion of associativity and co-operation between enterprises [39]. It is also important to link universities and research centres with local productive systems and to adapt legal frameworks for economic promotion. LED implementation requires a periodic evaluation of relevance, performance, efficiency, and impact [41]. Evaluations are divided into process and outcome evaluations, both of which are necessary to improve and verify the effectiveness of programmes. Assessing the impact of an LED strategy involves separating the direct results of the strategy from those caused by external factors, which can be challenging due to a lack of data or funds. In summary, LED is a complex process that requires the integration of the social economy, active community participation, and rigorous evaluation to ensure its effectiveness and sustainability. 3.4. Methodology The process of obtaining raw data involved several key steps, including stating the research objectives and variables, identifying the study population or sample, and choosing the data collection method. These techniques included questionnaires and document reviews, and approaches such as statistical analysis via SPSS and Excel were used to check the reliability of the results. The methods used in the research are the following: • Data collection techniques: o Surveys (questionnaires using a Likert scale); o Document analysis. • Data processing and analysis: o Use of statistical tools and software (SPSS 24, Excel 2016); o Descriptive and inferential statistical analysis. • Specific steps: o Define the variables and criteria for data organisation; o Input the data into statistical software and generate the results; o Verify and validate the hypotheses. 3.4.1. Hypothesis and System of Variables The general hypothesis postulates that there is a direct and significant relationship between the tax benefit granted by the Amazon Law and the economic development of small and medium associated agrarian producers in the regions of Junín and Huánuco. Total Income: PEN 6,562,081; Land 2024, 13, x FOR PEER REVIEW 10 of 36 generation [41]. The success of a community depends on effective strategic planning, and LED is increasingly used to strengthen local economic capacity; improve the investment climate; and increase the productivity and competitiveness of local businesses, entrepreneurs, and workers. An LED strategy should recognise the constraints and opportunities of the informal economy, promoting broad social benefits for all economic and social sectors, both formal and informal, excluded and disadvantaged. Local economic development (LED) is a comprehensive process that seeks to strengthen the capacities of a community, promoting redistribution, solidarity, integration, and inclusion. The social economy, especially the solidarity economy, is crucial for LED, as it is based on principles of co-operativism, economic democracy, and active community participation. This economy manifests itself in forms such as co-operatives, which meet economic and social needs by using a democratic structure. The dimensions of LED include the identification of territorial and population scope, the self-diagnosis of needs, the strengthening of the social fabric, and the creation of infrastructures for endogenous and sustainable development. Furthermore, it is essential to harmonise the political, professional, and community spheres and to promote financial services to encourage entrepreneurship. According to the ECLAC (Economic Commission for Latin America and the Caribbean), the evaluation and monitoring of LED is not only explained by decentralisation but also by complex factors arising from the territories, with the mobilisation of local actors. The criteria for LED action include the development of business services, access to credit for MSEs, and the promotion of associativity and co-operation between enterprises [39]. It is also important to link universities and research centres with local productive systems and to adapt legal frameworks for economic promotion. LED implementation requires a periodic evaluation of relevance, performance, efficiency, and impact [41]. Evaluations are divided into process and outcome evaluations, both of which are necessary to improve and verify the effectiveness of programmes. Assessing the impact of an LED strategy involves separating the direct results of the strategy from those caused by external factors, which can be challenging due to a lack of data or funds. In summary, LED is a complex process that requires the integration of the social economy, active community participation, and rigorous evaluation to ensure its effectiveness and sustainability. 3.4. Methodology The process of obtaining raw data involved several key steps, including stating the research objectives and variables, identifying the study population or sample, and choosing the data collection method. These techniques included questionnaires and document reviews, and approaches such as statistical analysis via SPSS and Excel were used to check the reliability of the results. The methods used in the research are the following: • Data collection techniques: o Surveys (questionnaires using a Likert scale); o Document analysis. • Data processing and analysis: o Use of statistical tools and software (SPSS 24, Excel 2016); o Descriptive and inferential statistical analysis. • Specific steps: o Define the variables and criteria for data organisation; o Input the data into statistical software and generate the results; o Verify and validate the hypotheses. 3.4.1. Hypothesis and System of Variables The general hypothesis postulates that there is a direct and significant relationship between the tax benefit granted by the Amazon Law and the economic development of small and medium associated agrarian producers in the regions of Junín and Huánuco. Allowed Deduction (0.5%): PEN 32,810; Land 2024, 13, x FOR PEER REVIEW 10 of 36 generation [41]. The success of a community depends on effective strategic planning, and LED is increasingly used to strengthen local economic capacity; improve the investment climate; and increase the productivity and competitiveness of local businesses, entrepreneurs, and workers. An LED strategy should recognise the constraints and opportunities of the informal economy, promoting broad social benefits for all economic and social sectors, both formal and informal, excluded and disadvantaged. Local economic development (LED) is a comprehensive process that seeks to strengthen the capacities of a community, promoting redistribution, solidarity, integration, and inclusion. The social economy, especially the solidarity economy, is crucial for LED, as it is based on principles of co-operativism, economic democracy, and active community participation. This economy manifests itself in forms such as co-operatives, which meet economic and social needs by using a democratic structure. The dimensions of LED include the identification of territorial and population scope, the self-diagnosis of needs, the strengthening of the social fabric, and the creation of infrastructures for endogenous and sustainable development. Furthermore, it is essential to harmonise the political, professional, and community spheres and to promote financial services to encourage entrepreneurship. According to the ECLAC (Economic Commission for Latin America and the Caribbean), the evaluation and monitoring of LED is not only explained by decentralisation but also by complex factors arising from the territories, with the mobilisation of local actors. The criteria for LED action include the development of business services, access to credit for MSEs, and the promotion of associativity and co-operation between enterprises [39]. It is also important to link universities and research centres with local productive systems and to adapt legal frameworks for economic promotion. LED implementation requires a periodic evaluation of relevance, performance, efficiency, and impact [41]. Evaluations are divided into process and outcome evaluations, both of which are necessary to improve and verify the effectiveness of programmes. Assessing the impact of an LED strategy involves separating the direct results of the strategy from those caused by external factors, which can be challenging due to a lack of data or funds. In summary, LED is a complex process that requires the integration of the social economy, active community participation, and rigorous evaluation to ensure its effectiveness and sustainability. 3.4. Methodology The process of obtaining raw data involved several key steps, including stating the research objectives and variables, identifying the study population or sample, and choosing the data collection method. These techniques included questionnaires and document reviews, and approaches such as statistical analysis via SPSS and Excel were used to check the reliability of the results. The methods used in the research are the following: • Data collection techniques: o Surveys (questionnaires using a Likert scale); o Document analysis. • Data processing and analysis: o Use of statistical tools and software (SPSS 24, Excel 2016); o Descriptive and inferential statistical analysis. • Specific steps: o Define the variables and criteria for data organisation; o Input the data into statistical software and generate the results; o Verify and validate the hypotheses. 3.4.1. Hypothesis and System of Variables The general hypothesis postulates that there is a direct and significant relationship between the tax benefit granted by the Amazon Law and the economic development of small and medium associated agrarian producers in the regions of Junín and Huánuco. Limit (40 UIT): PEN 158,000. - Disallowed Expense: PEN 46,810.00. (c) Payment Vouchers Not Compliant: - Amount: PEN 8460.00; - Deduction: Non-deductible (Art. 44 j) for non-compliance. (d) Expenses with Sales Receipts: - Amount: PEN 402,560.00; - Permitted Deduction: 6% of Cost of Sales + Sales Expenses: Land 2024, 13, x FOR PEER REVIEW 10 of 36 generation [41]. The success of a community depends on effective strategic planning, and LED is increasingly used to strengthen local economic capacity; improve the investment climate; and increase the productivity and competitiveness of local businesses, entrepreneurs, and workers. An LED strategy should recognise the constraints and opportunities of the informal economy, promoting broad social benefits for all economic and social sectors, both formal and informal, excluded and disadvantaged. Local economic development (LED) is a comprehensive process that seeks to strengthen the capacities of a community, promoting redistribution, solidarity, integration, and inclusion. The social economy, especially the solidarity economy, is crucial for LED, as it is based on principles of co-operativism, economic democracy, and active community participation. This economy manifests itself in forms such as co-operatives, which meet economic and social needs by using a democratic structure. The dimensions of LED include the identification of territorial and population scope, the self-diagnosis of needs, the strengthening of the social fabric, and the creation of infrastructures for endogenous and sustainable development. Furthermore, it is essential to harmonise the political, professional, and community spheres and to promote financial services to encourage entrepreneurship. According to the ECLAC (Economic Commission for Latin America and the Caribbean), the evaluation and monitoring of LED is not only explained by decentralisation but also by complex factors arising from the territories, with the mobilisation of local actors. The criteria for LED action include the development of business services, access to credit for MSEs, and the promotion of associativity and co-operation between enterprises [39]. It is also important to link universities and research centres with local productive systems and to adapt legal frameworks for economic promotion. LED implementation requires a periodic evaluation of relevance, performance, efficiency, and impact [41]. Evaluations are divided into process and outcome evaluations, both of which are necessary to improve and verify the effectiveness of programmes. Assessing the impact of an LED strategy involves separating the direct results of the strategy from those caused by external factors, which can be challenging due to a lack of data or funds. In summary, LED is a complex process that requires the integration of the social economy, active community participation, and rigorous evaluation to ensure its effectiveness and sustainability. 3.4. Methodology The process of obtaining raw data involved several key steps, including stating the research objectives and variables, identifying the study population or sample, and choosing the data collection method. These techniques included questionnaires and document reviews, and approaches such as statistical analysis via SPSS and Excel were used to check the reliability of the results. The methods used in the research are the following: • Data collection techniques: o Surveys (questionnaires using a Likert scale); o Document analysis. • Data processing and analysis: o Use of statistical tools and software (SPSS 24, Excel 2016); o Descriptive and inferential statistical analysis. • Specific steps: o Define the variables and criteria for data organisation; o Input the data into statistical software and generate the results; o Verify and validate the hypotheses. 3.4.1. Hypothesis and System of Variables The general hypothesis postulates that there is a direct and significant relationship between the tax benefit granted by the Amazon Law and the economic development of small and medium associated agrarian producers in the regions of Junín and Huánuco. Total Costs and Expenses: PEN 5,167,078; Land 2024, 13, x FOR PEER REVIEW 10 of 36 generation [41]. The success of a community depends on effective strategic planning, and LED is increasingly used to strengthen local economic capacity; improve the investment climate; and increase the productivity and competitiveness of local businesses, entrepreneurs, and workers. An LED strategy should recognise the constraints and opportunities of the informal economy, promoting broad social benefits for all economic and social sectors, both formal and informal, excluded and disadvantaged. Local economic development (LED) is a comprehensive process that seeks to strengthen the capacities of a community, promoting redistribution, solidarity, integration, and inclusion. The social economy, especially the solidarity economy, is crucial for LED, as it is based on principles of co-operativism, economic democracy, and active community participation. This economy manifests itself in forms such as co-operatives, which meet economic and social needs by using a democratic structure. The dimensions of LED include the identification of territorial and population scope, the self-diagnosis of needs, the strengthening of the social fabric, and the creation of infrastructures for endogenous and sustainable development. Furthermore, it is essential to harmonise the political, professional, and community spheres and to promote financial services to encourage entrepreneurship. According to the ECLAC (Economic Commission for Latin America and the Caribbean), the evaluation and monitoring of LED is not only explained by decentralisation but also by complex factors arising from the territories, with the mobilisation of local actors. The criteria for LED action include the development of business services, access to credit for MSEs, and the promotion of associativity and co-operation between enterprises [39]. It is also important to link universities and research centres with local productive systems and to adapt legal frameworks for economic promotion. LED implementation requires a periodic evaluation of relevance, performance, efficiency, and impact [41]. Evaluations are divided into process and outcome evaluations, both of which are necessary to improve and verify the effectiveness of programmes. Assessing the impact of an LED strategy involves separating the direct results of the strategy from those caused by external factors, which can be challenging due to a lack of data or funds. In summary, LED is a complex process that requires the integration of the social economy, active community participation, and rigorous evaluation to ensure its effectiveness and sustainability. 3.4. Methodology The process of obtaining raw data involved several key steps, including stating the research objectives and variables, identifying the study population or sample, and choosing the data collection method. These techniques included questionnaires and document reviews, and approaches such as statistical analysis via SPSS and Excel were used to check the reliability of the results. The methods used in the research are the following: • Data collection techniques: o Surveys (questionnaires using a Likert scale); o Document analysis. • Data processing and analysis: o Use of statistical tools and software (SPSS 24, Excel 2016); o Descriptive and inferential statistical analysis. • Specific steps: o Define the variables and criteria for data organisation; o Input the data into statistical software and generate the results; o Verify and validate the hypotheses. 3.4.1. Hypothesis and System of Variables The general hypothesis postulates that there is a direct and significant relationship between the tax benefit granted by the Amazon Law and the economic development of small and medium associated agrarian producers in the regions of Junín and Huánuco. 6%: PEN 310,025; Land 2024, 13, x FOR PEER REVIEW 10 of 36 generation [41]. The success of a community depends on effective strategic planning, and LED is increasingly used to strengthen local economic capacity; improve the investment climate; and increase the productivity and competitiveness of local businesses, entrepreneurs, and workers. An LED strategy should recognise the constraints and opportunities of the informal economy, promoting broad social benefits for all economic and social sectors, both formal and informal, excluded and disadvantaged. Local economic development (LED) is a comprehensive process that seeks to strengthen the capacities of a community, promoting redistribution, solidarity, integration, and inclusion. The social economy, especially the solidarity economy, is crucial for LED, as it is based on principles of co-operativism, economic democracy, and active community participation. This economy manifests itself in forms such as co-operatives, which meet economic and social needs by using a democratic structure. The dimensions of LED include the identification of territorial and population scope, the self-diagnosis of needs, the strengthening of the social fabric, and the creation of infrastructures for endogenous and sustainable development. Furthermore, it is essential to harmonise the political, professional, and community spheres and to promote financial services to encourage entrepreneurship. According to the ECLAC (Economic Commission for Latin America and the Caribbean), the evaluation and monitoring of LED is not only explained by decentralisation but also by complex factors arising from the territories, with the mobilisation of local actors. The criteria for LED action include the development of business services, access to credit for MSEs, and the promotion of associativity and co-operation between enterprises [39]. It is also important to link universities and research centres with local productive systems and to adapt legal frameworks for economic promotion. LED implementation requires a periodic evaluation of relevance, performance, efficiency, and impact [41]. Evaluations are divided into process and outcome evaluations, both of which are necessary to improve and verify the effectiveness of programmes. Assessing the impact of an LED strategy involves separating the direct results of the strategy from those caused by external factors, which can be challenging due to a lack of data or funds. In summary, LED is a complex process that requires the integration of the social economy, active community participation, and rigorous evaluation to ensure its effectiveness and sustainability. 3.4. Methodology The process of obtaining raw data involved several key steps, including stating the research objectives and variables, identifying the study population or sample, and choosing the data collection method. These techniques included questionnaires and document reviews, and approaches such as statistical analysis via SPSS and Excel were used to check the reliability of the results. The methods used in the research are the following: • Data collection techniques: o Surveys (questionnaires using a Likert scale); o Document analysis. • Data processing and analysis: o Use of statistical tools and software (SPSS 24, Excel 2016); o Descriptive and inferential statistical analysis. • Specific steps: o Define the variables and criteria for data organisation; o Input the data into statistical software and generate the results; o Verify and validate the hypotheses. 3.4.1. Hypothesis and System of Variables The general hypothesis postulates that there is a direct and significant relationship between the tax benefit granted by the Amazon Law and the economic development of small and medium associated agrarian producers in the regions of Junín and Huánuco. Limit (200 UIT): PEN 790,000; - Disallowed Expense: PEN 92,535.00. UIT means “Unidad Impositiva Tributaria”, and in English, it is called “Tax Unit”. This is a standard unit of measurement, which is used in some countries for quantitative computations of fees to be paid to the government, which include taxes, fines, and so on, such as for the country of Peru: - Fixed Value: The UIT is set legally by the government, and it can be different each year depending on such parameters as inflation or fiscal policy; - Used for Calculations: It helps in appreciating assessments as a standard measure way when computing taxes. For instance, such constraints as the limits in deductible expenses or in some taxes might be stated in terms of a multiple of the UIT; - Fines and Penalties: Another noteworthy measure of value is UITs; this is used in many fines or penalties, so the measure is the same for all types of obligations. The UIT also supports the stabilisation of financial laws and makes it much easier for taxpayers and authorities to do so. (e) Hiring of Disabled Employees: Land 2025,14, 30 33 of 35 - Amount: PEN 26,438.00; - Permitted Deduction: 50% of remuneration: PEN 13,219.00 (within legal limits). (3) Income Tax Calculation Table A4. At the current rate of 29.5%. Concept Amount (PEN) Profit Before Tax 465,528 Income Tax (29.5%) 180,143 Net Profit 285,385 Table A5. At the Proposed Rate of 10%. Concept Amount (PEN) Profit Before Tax 465,528 Income Tax (10%) 61,065 Net Profit 404,463 This can be evidenced by comparing the current domestic tax rate, which stands at 29.5%, and the proposed tax rate of 10%. According to the current rate, the tax would be PEN 180,143.00, whereas in the case of the proposed rate, the tax would be PEN 61,065.00. This means a decrease of PEN 119,078.00, which allows a better margin of profit for the co-operative, as well as the advance of the sustainable and integral development of the zone according to the objectives of the tax legislation. 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