TAIPEI, Taiwan — In a significant move to bolster its defense capabilities, Taiwan’s President Lai Ching-te unveiled plans on Wednesday for a $40 billion special budget dedicated to arms purchases and the development of advanced defense systems. The budget, spanning eight years from 2026 to 2033, includes the creation of the Taiwan Dome, a cutting-edge air defense system designed to enhance detection and interception capabilities. This announcement follows Lai’s earlier commitment to increase defense spending to 5% of the island’s GDP, up from the current 3.3% allocation for 2026, which amounts to $949.5 billion New Taiwan Dollars ($31.18 billion).
In an op-ed published in The Washington Post, Lai emphasized that the special budget would primarily fund arms procurement from the United States, reflecting Taiwan’s strategic alignment with its key ally. Wellington Koo, Taiwan’s Minister of National Defense, clarified that the $40 billion figure represents the upper limit of the budget. The funds will be allocated toward acquiring precision-strike missiles and fostering joint development and procurement initiatives between Taiwan and the U.S. for advanced military equipment and systems.
This decision comes amid escalating geopolitical tensions in the region and mounting pressure from the U.S. for Taiwan to strengthen its self-defense capabilities. The proposed budget underscores Taiwan’s proactive stance in addressing security challenges and safeguarding its sovereignty.