Taiwan to propose record defence budget for 2027

The Taiwan government will propose a record $35.2 billion defence spending for 2027, following the approval of its long-delayed 2026 budget. 

For the 2027 budget, President Lai Ching-te said on Monday, August 17, that military funding is set to exceed three per cent of the island’s gross domestic product (GDP).

The proposed allocation will also combine the annual defence budget and a special budget.

The increased funds come as Taipei seeks to strengthen its self-defence capabilities amid growing military pressure from China, which has long claimed the self-ruled island as its territory and has threatened to use force to annex it.

Defence spending an ‘investment in peace’

Lai positioned the proposed 2027 defence budget as an “investment in peace” in a report by Agence France-Presse, stressing “Taiwan’s resolve to strengthen its self-defence capabilities.”

He said the proposed 2027 defence budget, comprising the annual and special budget, would total TWD1.1225 trillion (US$35.2 billion), its highest ever yet. 

Using the North Atlantic Treaty Organisation’s standards for calculating spending, the country’s current defence expenditure amounts to TWD949.5 billion or around US$29.8 billion, according to the Brussels Morning Newspaper.

“We will continue to build a more robust defence force to maintain peace and stability in the Taiwan Strait and the region,” Lai said, as quoted by AFP.

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Budget follows record legislative delay

Lai’s announcement comes days after Taiwan’s legislature approved the central government’s 2026 budget following a record 266-day delay.

After months of political deadlock between the ruling administration and the opposition-controlled parliament, the lawmakers had finally authorised US$93 billion in overall spending.

Funding for the drone programme was also retained at US$1.9 billion. 

The ruling Kuomintang Party (KMT), which seeks closer ties with China, had previously threatened to cut the drone-related funding by 70 per cent, as reported by Al Jazeera. 

They later withdrew the proposed reduction after determining that the drone development and procurement programmes did not duplicate each other or result in unnecessary spending.

Furthermore, the Kuomintang and the Taiwan People’s Party, which control the legislature, approved a US$25 billion special defence budget in May, after cutting roughly one-third of the amount proposed by Lai’s Democratic Progressive Party.

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Growing pressure from China

Taiwan has been working to strengthen its defences amid growing military pressure from China.

The island has been investing in more agile weapons systems, including drones, to enhance its asymmetric warfare capabilities.

However, despite rising investment in drones, its military possesses fewer than 5,000 of the aircraft, compared with China’s reported order of nearly one million units due for delivery this year

Lai has previously said China’s military activities around Taiwan have increased in both frequency and scale.

He also argued that stronger defence capabilities are needed to stop any attempt to alter the cross-strait status quo through force or intimidation, as reported by Brussels Morning.

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