Taiwan’s budget agency has proposed 1.123 trillion Taiwan dollars, about $35.3 billion, for defense in 2027. The proposed allocation would be the island’s largest defense budget to date, according to Breaking Defense, which reported the proposal after Taiwan’s Directorate General of Budget, Accounting and Statistics, or DGBAS, released its budget statement.

The proposal is not yet an enacted budget. It must be approved by Taiwan’s opposition-controlled legislature before the government can spend the full amount. The budget agency’s announcement therefore establishes the requested defense allocation for the coming fiscal year, while the final amount remains subject to the legislative process.

The proposed allocation represents an 18 percent increase from the previous defense budget, the report said. It would equal 3.01 percent of Taiwan’s projected gross domestic product for the 2026 fiscal year. That fiscal year runs from Jan. 1 through Dec. 31. The GDP figure is a projection for the preceding fiscal year used in the budget presentation, rather than a measurement of Taiwan’s 2027 economic output.

The 3.01 percent figure describes the proposed defense allocation as a share of projected economic output. It does not by itself establish how the proposed spending would affect Taiwan’s deterrence efforts or its security position. The proposal comes as Taiwan continues efforts to deter a potential invasion from China, according to the report.

The proposed defense funding includes separate amounts for military operations, upkeep and weapons acquisition. Taiwan’s defense ministry could receive NT$691.9 billion from the approved defense budget for ongoing operations and maintenance. Another NT$218.2 billion would be assigned to special budgets for acquiring weapons. These amounts identify major parts of the proposal, while the overall defense allocation is listed as NT$1.123 trillion.

The figures do not add up to the full proposed defense allocation because the reported categories cover only specified portions of the budget. The overall amount announced by DGBAS remains NT$1.123 trillion, or approximately $35.3 billion. If approved, the funding would provide the defense ministry with the amounts designated for routine activity, upkeep and weapons purchases under the budget proposal.

President Lai Ching-te described the expected increase as an expression of Taiwan’s defense policy. He said it “demonstrates Taiwan’s determination to strengthen its self-defence capabilities.” Lai also said that investing in defense is investing in peace and that Taiwan would continue building a stronger defense force to maintain peace and stability in the Taiwan Strait and the region.

The proposed 3.01 percent share of GDP is below a benchmark previously urged by some US officials. Elbridge Colby, the US under secretary of defense for policy, has previously said Taiwan should spend 10 percent of its GDP on defense. That comparison concerns the share of economic output assigned to defense. It does not compare the total value of Taiwan’s and the United States’ economies or the contents of their defense budgets.

The proposal follows Taiwan’s approval of a separate special defense package from the previous year. In May, parliament passed a long-delayed NT$780 billion special defense budget. The opposition had reduced that package from the NT$1.25 trillion originally requested before the legislature approved it.

The earlier package does not determine the outcome of the 2027 proposal. It shows, however, that the amount submitted for defense can differ from the amount ultimately approved. For the new budget, the announced figure is the amount proposed by the budget agency, while the opposition-controlled legislature must decide whether to approve it and whether to make changes during that process.

Until legislative action is completed, the NT$1.123 trillion figure, the NT$691.9 billion for operations and upkeep, and the NT$218.2 billion for special weapons-acquisition budgets remain proposed allocations. The report does not specify how legislators will handle the new request. The central development is Taiwan’s proposal to set its 2027 defense budget at a record NT$1.123 trillion, with final spending dependent on approval by the legislature.