02 Mar 2016

On February 23, 2016, the Indonesian House of Representatives passed the bill on Public Housing Savings into law. The law on Public Housing Savings (Tabungan Perumahan Rakyat / “Tapera Law”) will be the foundation for the government’s Tapera Program, a housing savings program for workers which will be established to help low income people attain proper housing. The Tapera Law is awaiting the ratification by the President.


We highlight the following provisions of the Tapera Law:


  • Employees who (i) are at least 20 (twenty) years old or already married at the time of registration, and (ii) earn at least the minimum wage, must join the Tapera Program. Their employers are responsible for their registration in the program. The requirement to join the Tapera Program also applies to foreign workers who hold working visas of more than 6 (six) months.
  • Independent workers earning at least the minimum wage are obliged to register themselves in the Tapera Program. Independent workers earning less than the minimum wage have the right but are not obliged to register themselves in the program.
  • The Tapera Program will be administered by the Tapera Management Agency (“BP Tapera”), a legal entity which will be established based on the Tapera Law. BP Tapera will inter alia appoint the program’s investment manager, custodian bank and participating banks or financing institutions, and be their supervisor.
  • Each participating employee will have an individual account at the custodian bank. The employer and employee are to jointly deposit on a monthly basis an amount of money being a percentage of the employee’s salary to the account, as the employee’s savings. The employer is to withhold the employee’s portion from the employee’s salary and deposit it along with its portion to the employee’s account. The salary percentage for the savings will be determined under a government regulation.
  • The savings fund will be invested either conventionally or on the basis of Sharia principles, at the choice of each participating employee. The investment will be managed by an investment manager on the basis of an agreement with the custodian bank.
  • The funds of the Tapera program may be used by employees who (i) have been participating in the Tapera program for at least 12 (twelve) months, (ii) have a low income, (iii) do not yet own a house and (iv) use the funds to finance housing ownership, housing construction or housing improvement. The fund will be allocated through banks and financial institutions which are specialising in housing finance and appointed by BP Tapera as participants in the program.
  • An employee’s participation in the Tapera Program will cease upon either (i) the employee’s retirement, or (ii) the employee’s reaching the age of 58 (in case of independent workers), or (iii) the employee death, or (iv) the employee’s failure to meet the requirements as a participant for 5 years in a row. Upon the cessation of the participation, the employee’ savings along with the accumulations will be paid to the employee.


The Tapera Law imposes administrative sanctions on all of the parties involved in the Tapera Program for violation of its provisions. Employers who fail to, inter alia, (i) register their employees in the Tapera Program, (ii) collect and deposit the employee’s portion into the employee’s account, and (iii) update the employee’s data (in connection with Tapera membership) will be deemed as having violated the law, for which they face administrative sanctions of written warnings, administrative penalty, publication of the violation, suspension and/or revocation of their business license.


The Tapera Law will come into effect in 2018 at the latest.


The Tapera Law is strongly opposed by employers organisations, which argue that it creates additional financial burden to employers. The Indonesian Employers Association (Apindo) has announced that it will file a judicial review with the Constitutional Court to have the law repealed.