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 (USD35.1 billion) to defence in 2027, President Lai Ching-te said on 17 August during a review of the island's draft central budget. The figure comprises funding from both Taiwan's regular defence budget and special-budget allocations.

The proposed allocation represents a 4.4% increase over Taiwan's total defence spending in 2026, which totalled TWD1.0748 trillion and comprised both 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.

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.

In May, Taiwan's Legislative Yuan approved TWD780 billion in special-budget funding to support procurement of US military equipment between 2026 and 2033. Although scaled back from the government's original TWD1.25 trillion proposal, the package established a substantial supplementary funding mechanism for future defence acquisitions.

The 2027 budget proposal also follows recent measures to strengthen Taiwan's domestic unmanned systems sector.

On 14 August, the Legislative Yuan approved TWD8.3 billion in FY2026 funding for the Executive Yuan's Unmanned Vehicle Industry Development Integrated Plan, part of a six-year programme valued at about TWD44.2 billion. The initiative is intended to strengthen Taiwan's unmanned systems industrial base through investments in research and development, manufacturing, testing infrastructure, and supply-chain development.