25 August 2022

Taiwan proposes large increase in defence spending

by Jon Grevatt & Andrew MacDonald

Janes Defence Budgets forecasts that Taiwan's military expenditure will expand strongly in the next few years before declining when allocated ‘special funding' comes to an end. (Janes Defence Budgets)

Taiwan has proposed strong growth in defence funding amid rising tension with China. The island's Executive Yuan announced on 25 August that the budget for Taiwan's Ministry of National Defense (MND) in 2023 will be TWD415.1 billion (USD13.7 billion). It said this represents a year-on-year increase of CNY47.5 billion (USD6.9 billion) or 12.9%.

Additional defence funding worth TWD108.3 billion has also been allocated for 2023 through two previously assigned ‘special funds'. These are used to finance both Lockheed Martin F-16V fighter aircraft on order from the United States and enhancements in naval and air combat capability.

The Executive Yuan also said it had allocated an additional TWD62.9 billion for non-operating special funds, which finance army housing and defence production. Together, this takes the proposed total expenditure for 2023 to TWD586.3 billion. This figure is an approximate 24% increase over the total 2022 allocation of TWD471.7 billion.

The F-16V procurement was approved by Taiwan in October 2019. It plans to allocate TWD247.2 billion towards this acquisition between 2020 and 2026. The aircraft are scheduled for delivery between 2023 and 2028, and TWD45.1 billion is due to be spent on the programme in 2023.

Taiwan's defence spend was further boosted in 2021, when the Executive Yuan announced plans to allocate TWD240 billion for the second defence special fund from 2022 to 2026.

According to associated legislation, this funding is designated specifically for Taiwan's “naval and air combat capabilities” including “guided and high-performance missiles and other weapons systems”. This special fund will rise from TWD48 billion in 2022 to TWD63.2 billion in 2023.

Taiwan has proposed strong growth in defence funding amid rising tension with China. The island's Ex...

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