Update: Taiwan proposes USD35 billion defence budget for 2027
Taiwan's 2027 defence budget was announced a few days after the conclusion of Exercise ‘Han Kuang 42', which highlighted several capabilities that Taiwan is increasingly prioritising. Above a CM-32 armoured vehicle takes part in the exercise. (Daniel Ceng/Anadolu via Getty Images)
Taiwan's government plans to allocate TWD1.1225 trillion (USD35.3 billion) to defence in 2027. The Executive Yuan approved the draft central government budget on 20 August, three days after President Lai Ching-te announced the planned allocation during a budget review.
The proposed figure for 2027 comprises funding from both Taiwan's regular defence budget and special-budget allocations. It represents a 4.4% increase over Taiwan's total defence spending in 2026, which totalled TWD1.0748 trillion and similarly comprised regular and special-budget funding.
A Presidential Office press release cited Lai as saying that the 2027 defence budget reflects Taiwan's commitment to strengthening self-defence capabilities and maintaining stability across the Taiwan Strait and the wider region. He said combined defence spending would again exceed 3% of GDP.
Budget breakdown
According to Taiwan's Directorate-General of Budget, Accounting and Statistics (DGBAS), the total defence budget for 2027 comprises TWD691.9 billion for the Ministry of National Defense (MND), TWD218.2 billion from special budgets, and TWD60.7 billion from non-business special funds.
It also includes TWD103.8 billion in military retirement payments and TWD47.9 billion for the Coast Guard Administration.
The DGBAS said the defence allocation forms part of the proposed TWD3.926 trillion central government budget for 2027. The Executive Yuan said it would submit the proposal to the opposition-controlled Legislative Yuan for review by the end of August.
Modernisation
The increase comes as Taiwan continues to expand military modernisation efforts amid growing pressure from China, with a particular focus on asymmetric warfare, distributed operations, and resilience.
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