Taiwan has announced a proposed defense budget of 1.123 trillion Taiwan dollars, equivalent to approximately $35.3 billion, for fiscal year 2027. The 18 percent increase reflects the island’s efforts to deter a potential invasion by China.
The proposal was released by Taiwan’s Directorate General of Budget, Accounting and Statistics (DGBAS), an agency under the island’s cabinet.
Taiwan’s largest defense budget
The proposed amount represents approximately 3.01 percent of Taiwan’s projected GDP for fiscal year 2026, which runs from Jan. 1 through Dec. 31.
The proposed defense allocation includes:
- NT$691.9 billion for ongoing operations and maintenance;
- NT$218.2 billion for a special budget dedicated to weapons procurement;
- the remaining funds for other defense-related expenses and activities.
Taiwanese President Lai Ching-te said the increase demonstrates the island’s determination to strengthen its self-defense capabilities.
Pressure from the United States
The increase is unlikely to satisfy some U.S. officials, who have repeatedly urged Taiwan to spend more on defense.
Elbridge Colby, the U.S. undersecretary of defense for policy, has previously said that Taiwan should allocate 10 percent of its GDP to defense. By comparison, the proposed 2027 budget, at 3.01 percent of GDP, remains substantially lower.
Parliament must approve the budget
The proposal follows Taiwan’s approval in May of a delayed NT$780 billion special defense budget.
Taiwan’s opposition parties had reduced the amount from the NT$1.25 trillion originally requested by the government.
The new 2027 budget proposal will also require approval from Taiwan’s opposition-controlled legislature. The parliamentary process could lead to further negotiations and possible reductions, particularly in the funds earmarked for weapons procurement.
