Indonesia introduces new ‘Tapera Law’ that aims to provide long-term financing for housing could require employer and employee contributions to a new savings program starting in March 2018. The law on Public Housing Savings, known as the Tapera law, was signed on March 24, 2016.
Final regulations and a specific implementation date are not yet available, although both must occur within two years of the law’s signing.
Indonesia faces a significant housing shortage, with a vast proportion of the population unable to afford to buy a home. The Tapera law is one of multiple measures (including an affordable homes program) aimed at enabling more of the working population to buy a property.
The key details currently available are:
Although specific implementing regulations are not yet available, it is clear that the program will increase employer costs. Employers in Indonesia have already seen significant cost increases with the implementation of the BPJS Healthcare and BJPS Employment programs, including the universal pension system, in place since January 2015.
Employers need to understand the potential financial consequences and monitor developments.
Furthermore, according to a recent development, Indonesian Vice President Jusuf Kalla has proposed the implementation of an ASEAN minimum wage for workers in the ASEAN member countries to ensure equality in the region.
Stressing on the importance to prevent unhealthy competition, Jusuf Kalla urged that “the ASEAN countries must not force workers to compete on lower wages but must work together to create a minimum standard wage to induce a healthy competition.”
News credits: towerswatson.com & Antaranews.com
Image credit: indonesiaurbanstudies.blogspot.com