Taiwan has unveiled plans to significantly ramp up its defence outlay in 2026, marking a historic shift as the budget surpasses 3% of GDP for the first time since 2009. Premier Cho Jung-tai announced that the proposed defence allocation will total NT$949.5 billion (approximately US$31.3 billion), equivalent to 3.32% of gross domestic product, reflecting a 22.9% increase compared to this year’s spending.
The expanded budget integrates expenditures on the military, coast guard, veterans’ affairs, and special projects, aligning Taiwan’s budgeting with a “NATO model”. This marks the first time the coast guard, often on the front line in maritime stand-offs with China, has been included in Taiwan’s defence calculations.
State officials emphasised that the increase underscores Taiwan’s determination to safeguard its sovereignty and contribute to regional stability in the Indo-Pacific. The decision responds to escalating Chinese military pressure, ranging from near-daily air force provocations to grey-zone tactics and growing U.S. insistence that Taipei invest more in its own security.
Premier Cho noted the importance of this budget as a message to both the domestic audience and the international community of Taiwan’s readiness and resilience. The budget includes NT$117.6 billion allocated for special defence projects such as new fighter jets and naval defenses. Operational maintenance costs are set to rise sharply by nearly 35% to NT$199 billion, to cover ammunition, spare parts, and other essentials.
Personnel remains the largest share of defence expenditures at NT$200.8 billion, and military investments —including payments for U.S.-acquired arms are projected to climb by 16.8%, reaching NT$161.6 billion.
In context, this surge in defence spending arrives amid China’s own military expansion: Beijing recently unveiled a 7.2% increase in its 2025 military budget roughly US$248 billion well above its projected economic growth rate.
