Introductory Public Housing Saving (TAPERA) Program

By: Muhammad Haryadi and Alda Humaira

A. Background

Indonesian Government introduced a regulation regarding Public Housing Saving in 2016 or widely known as ‘’Tapera’’ through the Law Number 4 of 2016, which was issued to ensure and provide sustainable, long-term funds with the purpose of housing financing for its participants. As an underlying for Tapera program implementation, the Indonesian Government has also issued the Government Regulation Number 25 of 2020 regarding Implementation of Public Housing Saving as amended by Government Regulation Number 21 of 2024 (‘’GR 21/2024’’).

B. Public Attention

The issuance of its implementation regulation in 2020 has already raised public attention since it obligates every employee including private sector employees to contribute a specific percentage of their monthly income as a participant of Tapera, while in 2016 the provision regarding the percentage has not been set out.

Other than that, GR 21/2024 is interpreted as a way of government to avoid their responsibility to provide proper house for Indonesian citizen once the Public Housing Savings Management Agency (‘’BP Tapera’’) has fully operated and could manage participant’s Tapera properly.

C. Tapera Amount & Overseas Housing Program

Basically, Indonesian government obligates all employee, whether independent or non-independent, to be a participant of Tapera provided that such employee has fulfilled one of the following criterias:

  1. Having income equivalent to regional minimum wages;
  2. Reaching the age of 20 (twenty) years old; or
  3. Under marital status.

All participants must contribute 3% of their monthly income for Tapera, in which 0,5% of such contribution will be borne by the employer and the rest 2,5% will be borne by the employees themselves. Further, such funds will be managed by an investment manager appointed by BP Tapera in the form of collective investment contract. The savings of participants and its profits will be utilized for financing the house purchase, erection, or renovation.  Such funds can also be withdrawn by the participants due to retirement, death, reaching the requirement age of 58 (fifty eight) years old (for independent employee) or the failure to fulfil the rules of BP Tapera for 5 (five) consecutive years.

As a comparison, Singapore also applies similar housing program called Central Provident Fund (‘’CPF’’). In this program, all participants must contribute 37% from their wages and non-wages income (e.g. annual bonus) with composition 20% of such amount will be borne by the employee and 17% (seventeen percent) of such amount will be borne by the employer.

Unlikely Tapera program in Indonesia, CPF allows the participants to choose its investment method offered by them, whether in form of Singaporean Government Bonds, Unit Trusts, or others. It shows the transparency, accountability and risk appetite appreciation other than solely relying to investment manager chosen by BP Tapera.

D. Regulation Applicability & Sanctions

The Tapera program will be fully effective in 7 years since the issuance of GR 21/2024. In that sense, the ministry of manpower will be preparing and issuing a regulation to further regulate the details of Tapera Program and such issuance is treated as a fully effectiveness sign.

GR 21/2024 stipulates the following sanctions to the employer who does not register its employee as a participants or neglect to pay the contribution of Tapera program:

  1. Written notices. If the employer fails to comply with the regulation, BP Tapera may issue 2 times warning letters with 10 days gap between each notice.
  2. Administrative sanction. If the employer remains fail to comply, BP Tapera may give a penalty amounting at 0,1% per-month from the saving amount supposedly paid by the employer.
  3. Publication. If the employer remains fail to comply, BP Tapera may loudly publish the employer disobedience by firstly obtaining the approval of relevant authorities.
  4. Business Suspension. If the employer remains fail to comply, BP Tapera may recommend the relevant authority to suspend the business of employer.
  5. Business Permit Revocation. If the employer remains fail to comply, BP Tapera may recommend the relevant authority to revoke the business license of employer.

Moreover, different administrative sanction in the form of 2 times written notices also applicable for the unregistered or neglect freelancer.