Taiwan parliament approves NT$780 billion defence spending package for US arms purchases

Taiwan's Legislative Yuan passed the Special Act for Safeguarding National Security and Strengthening Asymmetric Combat Capabilities Procurement (the Act) on 8 May 2026, authorising a total budget ceiling of NT$780 billion for the purchase of United States military equipment.

The bill, put forward jointly by the opposition Kuomintang (KMT) and Taiwan People's Party (TPP), was passed through a third reading following a vote in the chamber on Friday afternoon. The approved sum is approximately US$24.86 billion, according to Reuters.

The passage represents a significant reduction from the NT$1.25 trillion supplementary defence package sought by President Lai Ching-te, which Reuters reported would have amounted to approximately US$39.81 billion.

The opposition, which holds the most seats in the legislature, argued that the government's original proposal lacked clarity and raised the risk of corruption.

Fu Kun-chi, parliamentary whip for the KMT, told reporters that the approved legislation safeguarded Taiwan's security and protected what he described as the hard-earned money of the Taiwanese public.

Taiwan's defence ministry had not issued a comment at the time of the bill's passage, Reuters reported.

Procurement items and budget structure

The Act specifies two tranches of procurement with separate budget ceilings.

The first tranche, capped at NT$300 billion, covers weapons systems whose purchase terms are already established. These include the M109A7 self-propelled howitzer, the High Mobility Artillery Rocket System (HIMARS), anti-armour unmanned aerial vehicle missile systems, the Javelin anti-armour missile, and the TOW 2B anti-armour missile.

The second tranche carries a budget ceiling of NT$480 billion. It covers items subject to US government approval within one year of the Act's entry into force. These include combined soft-kill and hard-kill counter-drone systems, various anti-ballistic and air defence missiles, low-to-medium altitude air defence systems, and replenishment of anti-armour missile combat stocks.

The Act specifies that budgets between the two tranches may not be reallocated without legislative consent.

Legislative oversight and reporting requirements

The Act imposes structured oversight obligations on the Executive Yuan before any budget funds may be drawn.

Within one month of the Act's passage, the Executive Yuan must submit to the legislature a special report covering the past five years of military procurement, including amounts spent, operational benefits, and delivery status.

The report must also address how the acquired capabilities will enhance joint operational effectiveness, projected procurement timelines, expected delivery schedules, and projected whole-of-life maintenance costs.

Additionally, the report must outline post-procurement strategies for personnel training, logistics support, and information and communications system maintenance.

Only upon the legislature's approval of the special report may the Executive Yuan proceed to compile a budget submission. The budget must then be sent to the Legislative Yuan for review within two months of that approval. The same process applies to the second tranche.

Procurement is to be budgeted on an annual basis, with subsequent periods and appropriations subject to legislative approval.

Reporting obligations are also ongoing. The responsible authority must submit project progress and performance reports to the legislature each legislative session for the duration of the Act.

Social welfare spending protected

A specific provision in the Act prohibits any reduction in social welfare expenditure as a result of the expanded defence appropriation.

The Act states that, for every fiscal year during its implementation period, central government social welfare spending may not fall below the level set out in the 2026 central government general budget. This provision was included to prevent defence spending from displacing welfare commitments.

Implementation period

The Act takes effect from the date of promulgation and remains in force until 31 December 2033. Any portions of the budget unspent at the expiry of the implementation period may, if necessary, be carried over with legislative consent.

US arms sales backdrop

The legislation follows a series of significant US arms sale notifications to Taiwan. In December 2025, Washington announced an arms sales package for Taiwan valued at US$11 billion, described by Reuters as the largest such package ever approved.

Reuters has also reported, citing sources, that a second US arms package worth approximately US$14 billion may be announced following US President Donald Trump's visit to China, which was scheduled for the week after the bill's passage.

China has repeatedly called on Washington to cease arms sales to Taiwan. Taiwan rejects Beijing's claim of sovereignty over the island.

Taiwan's President Lai had framed the supplementary defence package as essential to strengthening deterrence, including through domestic defence programmes such as drone development, in addition to US arms purchases.