Taiwan Defence Spending: Taiwan is set to spend more money on its military this year after the Cabinet approved an extra NT$145.7 billion (about US$4.6 billion) for defence. The new funding will push Taiwan’s total defence-related spending in 2026 above NT$1 trillion for the first time.
The decision came on Thursday, September 3, as Taiwan continues to increase its military strength because of growing pressure from China. The extra money will mainly be used for weapons, missiles, drones and other military equipment.
Defence spending to reach about 3.83% of GDP
Taiwan had already planned to spend about NT$949.5 billion on defence in 2026. That amount was equal to 3.32% of the country’s GDP under Taiwan’s NATO-based defence spending calculation. The new extra funds are expected to take the total to around 3.83% of GDP.
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This would put Taiwan’s defence spending at its highest level in decades. It also takes the country past the NT$1 trillion mark for the first time in the current year.
The new package is part of a wider push by President Lai Ching-te’s government to improve Taiwan’s ability to defend itself. Taiwan has been increasing spending on missiles, drones and locally made military systems as Chinese military activity around the island continues.
Why is Taiwan adding more Defence Money?
The extra budget is also linked to a larger defence package that was proposed earlier this year. In April, Taiwan’s government proposed an eight-year special defence package worth up to NT$1.25 trillion. The plan was meant to buy advanced weapons and improve Taiwan’s defensive and asymmetric military capabilities. It included work on air and missile defence, AI-based military technology and other modern systems.
However, lawmakers later cut NT$470 billion from that plan. The opposition-controlled legislature approved funding of about US$25 billion for US weapons, but did not approve the full amount originally wanted by the government. The Cabinet has now moved some of the earlier defence plans into the new supplementary budget.
The government said it doesn’t want defence plans to face a funding gap. In its statement, the Cabinet said, “there can be no gap in national defence”.
Where will the new money go?
A major part of the NT$145.7 billion will be used for military investment. Around NT$133.4 billion is planned for weapons and other defence projects. This includes missiles, unmanned systems and two programmes whose details haven’t been made public. The main allocations include:
| Defence area | Funding |
|---|---|
| Total extra defence budget | NT$145.7 billion |
| Military investment | NT$133.4 billion |
| Seven defence projects | NT$13 billion |
| Uncrewed systems | NT$55.9 billion |
| Two classified programmes | NT$64.5 billion |
The NT$13 billion allocation will cover seven defence projects. One of them is the locally developed Chiang Kung missile system, also known as Strong Bow. It’s a medium-altitude anti-tactical ballistic missile system designed to strengthen Taiwan’s air defence.
Another NT$55.9 billion will go to three types of uncrewed systems. These include coastal attack drones, coastal reconnaissance drones and small one-way unmanned surface vessels.
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According to Taiwan’s Cabinet proposal, the planned purchases for 2027 include more than 40,000 coastal attack drones, 600 coastal reconnaissance drones and more than 100 small one-way unmanned surface vessels. These systems are meant to improve surveillance and give Taiwan more tools to respond to a possible attack.
The two classified programmes will receive NT$64.5 billion. Their exact details have not been publicly released.
Taiwan bigger Defence Spending
The latest increase is not expected to be the last major rise in Taiwan’s military budget. The Cabinet has already approved a proposed 2027 defence budget of NT$1.1225 trillion. That would equal about 3.01% of GDP and would also keep Taiwan’s defence spending above the NT$1 trillion level. President Lai has said the country should keep defence spending above 3% of GDP and gradually move toward 5% by 2030.
