Taipei: Taiwan’s Executive Yuan has unveiled a NT$3.13 trillion (US$102.9 billion) government expenditure proposal for 2026, marking a notable rise in military spending. This proposal, which includes NT$3.03 trillion for the central government’s general budget and an additional NT$100.8 billion in special allocations, was submitted by the Cabinet’s Directorate General of Budget, Accounting and Statistics (DGBAS) and is poised for legislative approval by the end of the month.
According to Focus Taiwan, the fiscal scheme for 2026 outlines an enhancement in funding for the Ministry of National Defense (MND) by NT$93.8 billion, a 20.1 percent year-on-year increase. This boost is intended to cover payments for defense articles and the procurement of additional ammunition and spare parts. Including veterans’ and Coast Guard expenses, Taiwan’s military spending is projected to reach NT$949.5 billion, which accounts for 3.32 percent of the nation’s GDP.
President Lai Ching-te expressed through social media that the proposed augmentation of the military budget is aimed at fortifying Taiwan’s security and demonstrating the country’s dedication to bolstering its defense capabilities.
Beyond military expenditures, the plan also proposes an increase in public infrastructure spending by NT$93 billion, or 16.1 percent, elevating the total to NT$670.4 billion. This allocation encompasses flood control projects, provincial expressway improvements, and the construction of AI computing data centers, according to the DGBAS.
The government is set to allocate NT$203.1 billion for technology development, a 15.1 percent rise from 2025, to support basic science research as well as research and development in drones, robotics, and low Earth orbit (LEO) satellites. Additionally, NT$299.3 billion has been designated for public development projects, including the underground placement of a railway line in Taoyuan, and the establishment of seawater desalination plants in Tainan and Hsinchu County.
DGBAS official Hsu Yung-i disclosed at a Cabinet briefing in Taipei that the government also plans to infuse NT$120 billion into the Labor Insurance Fund and NT$20 billion into the National Health Insurance (NHI) system. Despite these investments, the Cabinet has dismissed a proposal to raise salaries for military personnel, civil servants, and public school teachers next year, attributing the decision to economic challenges posed by U.S. tariffs and the NT$10,000 cash handouts to Taiwanese citizens sanctioned by the Legislature.
Premier Cho Jung-tai highlighted DGBAS data indicating a projected tax revenue of NT$2.86 trillion for 2026, which is NT$302.5 billion less than in 2025. Cho noted that the proposed NT$3.03 trillion general budget, along with the NT$100.8 billion in special funding and an anticipated NT$126.5 billion for debt repayments, will result in a NT$400 billion shortfall in 2026. The government intends to bridge this gap through borrowing.
The reduction in revenue is attributed to legislative changes enacted by the opposition-controlled Legislature, which mandate the central government to allocate a greater portion of tax revenues to local authorities. As per DGBAS data, over 90 percent of value-added tax and almost 30 percent of commodity tax, previously retained by the central government, will now be redirected to local governments.