Authors: Sydney Boerner & Joe O’Connor
Introduction
On November 19, 2025, Taiwanese President Lai Ching-te officially announced his administration’s proposal for a NT$1.25 trillion (US$40 billion) special defense budget through a press conference and an editorial in the Washington Post. The proposal, formally titled the Draft Special Act on Procurement for Enhancing Defense Resilience and Asymmetric Capabilities, or the National Defense Resilience Act, is supported by the Ministry of National Defense (MND) and emphasizes “Resilience” (韌性), framing security as the whole of society’s ability and capacity to withstand and recover from external pressures.
On January 26, 2026, the Taiwan People’s Party (TPP), an opposition party allied with the Kuomintang (KMT), introduced an alternative proposal titled the Draft Special Act for Procurement of Plans to Safeguard National Security and Strengthen Asymmetric Warfare Capabilities. The proposal emphasizes “Safeguard” (保衛), highlighting the state’s responsibility to protect territorial integrity through established hardware rather than a whole-of-society framework. It sets a ceiling of NT$400 billion (US$12.69 billion), approximately one-third of the Lai administration’s proposal, but still larger than the Tsai administration’s 10% year-over-year increase in 2021 of NT$42.1 billion (US$1.51 billion). Prior to this proposal, the KMT/TPP majority in the LY successfully blocked placing the DPP proposal on the agenda multiple times, effectively rendering it dead on arrival until this alternative was announced.
Both proposals remain actively under review in the Legislative Yuan (LY), and most importantly, are multi-year funding packages in addition to yearly “base” defense budgets. Their current status allows for comparisons between the proposals with respect to funding levels and oversight mechanisms. As of the time of writing, the KMT has also stated that they will be releasing a third budget proposal of their own, but information about it has not been released so far.
General Budget Comparison
The two proposals reflect different governance approaches and political priorities. The DPP emphasizes long-term flexibility, broader strategic objectives, and standard oversight, while the TPP emphasizes legislative control, fiscal transparency, and strict procedural accountability.
As stated above, the primary difference between the proposals is the topline ceiling of appropriations, with the TPP proposal setting a ceiling of NT$400 billion, roughly 32 percent of the DPP’s proposed NT$1.25 trillion. Both proposals share the same eight-year timeline from 2026 to 2033. The DPP proposal authorizes an eight-year lump sum with inter-category transfers and rollover of unspent funds, allowing year-over-year budgetary flexibility. In contrast, the TPP proposal requires an annual release vote on funds, prohibits inter-category transfers, and mandates that any unspent funds be returned to the National Treasury rather than rolled over, framing these requirements as measures of fiscal transparency and legislative accountability.
Oversight, reporting, and procurement procedures also differ between the proposals. The DPP proposal relies on standard oversight via the LY Foreign Affairs and National Defense Committee, records unit prices in a classified annex, and handles price increases through internal review under U.S. Foreign Military Sales (FMS) procedures. The proposal is exempt from the Public Debt Act, which enforces a 50% debt-to-GDP spending cap for all budgets. Additionally, it follows constitutional reporting standards, wherein the President is not required to report directly or answer questions to the LY – an issue that has recently sparked a minor constitutional crisis. Procurement may include emergency purchases from domestic suppliers or friendly third nations, and the proposal establishes links to NATO spending targets of 3.3 percent of GDP in 2026 and 5 percent by 2030 within standard procurement cycles.
In contrast, the TPP proposal grants line-item veto authority to the LY Foreign Affairs and National Defense Committee, requires public disclosure of unit prices, and mandates a re-vote if any item price increases by more than 5 percent. The proposal mandates the President deliver a “National Defense Report” before the LY and respond to questions, in line with the recently amended Law on the Exercise of Offices and Powers of the Legislative Yuan; the constitutionality of this action is disputed and in 2024, the Constitutional Court heard arguments on the issue. The proposal is subject to the Public Debt Act’s spending ceilings; procurement is restricted to U.S. FMS sales (with a 30-day congressional notification period); and spending focuses exclusively on hardware, in accordance with existing U.S. notifications.
Hardware and Weapons Systems Procurement
Both proposals maintain key artillery and missile capabilities, but they differ in priorities, scope, supporting systems, and integration across operational domains. The DPP proposal develops a broad, multi-domain capability that reflects the MND’s seven major objectives. In contrast, the TPP proposal prioritizes a narrower set of newly announced procurement programs within strict budget caps, with reduced integration and supporting systems, reflecting a focus on immediate operational needs and legislative oversight.
Building on the differences in governance and political priorities, the proposals also differ in their approach to hardware procurement. The DPP proposal is designed to strengthen seven major defense objectives through special provisions, including:
- “A multi-layered air interception network”
- “Command and control and decision support”
- “Multi-layered weakening”
- “Long-range precision strike”
- “Strengthening combat resilience”
- “Enhancing military capacity”
- “Defense driving economic benefits”
Procurement items include:
- “Precision artillery”
- “Long-range precision strike missiles”
- “Unmanned vehicles and their countermeasures systems”
- “Air defense, anti-ballistic missile and anti-armor missiles”
- “AI-assisted and C5ISR systems”
- “Enhancing sustained combat capacity equipment”
- “Equipment and systems jointly developed and procured by Taiwan and the United States”
In terms of precision artillery, the DPP procurement plan includes 60 M109A7 Paladin self-propelled howitzers with 4,080 precision-guided munitions, 60 M992A3 ammunition vehicles, and 12 M88A2 Hercules recovery vehicles. Long-range precision strike missile capabilities include 82 M142 High Mobility Artillery Rocket System (HIMARS) multiple-launch rocket launcher systems, 1,203 Guided Multiple Launch Rocket System (GMLRS) pods, and 420 Army Tactical Missile System (ATACMS) missiles. Unmanned vehicles and countermeasures include 1,554 ALTIUS-700M loitering munitions and 478 ALTIUS-600ISR surveillance drones, in addition to more than 200,000 drones of various types and 1,000 unmanned surface vessels. Air defense, anti-ballistic, and anti-armor capabilities include 1,050 FGM-148 Javelin anti-armor missiles and 70 launchers, as well as 1,545 BGM-71F TOW-2B anti-armor missiles and 24 launchers. AI-assisted and C5ISR systems include artificial intelligence decision-support systems, tactical communication networks, and rapid intelligence-sharing kits. To strengthen operational sustainability, the DPP procurement plan establishes strategic stockpiles of ammunition, including 105mm and 120mm tank rounds, 30mm autocannon rounds, and 155mm artillery and grenade munitions. The proposal also calls for establishing domestic production lines for other combat equipment, including chemical protective masks, night-vision devices, armored vehicles, and mobile barrier equipment. Finally, the DPP’s proposal includes the procurement of systems jointly developed with the United States to acquire emerging technologies, enhance operational resilience, and strengthen asymmetric warfare capabilities.
In contrast, the TPP proposal adopts a narrower procurement framework centered on a defined set of high-priority, primarily ground-based, strike and anti-armor systems subject to explicit fiscal ceilings. Rather than pursuing a comprehensive, multi-domain modernization effort, the proposal emphasizes targeted investments in immediately deliverable capabilities, strict budget caps, and phased legislative oversight under the total NT$400 billion ceiling. It omits broader initiatives related to integrated air and missile defense expansion, large-scale unmanned fleets, AI-assisted C5ISR architecture, strategic stockpiling, domestic industrial expansion, and wide-ranging joint development programs, reflecting a more limited scope focused on core denial capabilities.
Regarding procurement items, the TPP plan maintains the MND’s plans for 60 M109A7 Paladin self-propelled howitzers, including the accompanying 4,080 PGMs, 60 ammunition vehicles, and 12 recovery vehicles, but caps the total at NT$126.7 billion. It also keeps plans for 82 M142 HIMARS systems with 1,203 GMLRS pods and 420 ATACMS, also capped at NT$127.6 billion. Lastly, the TPP plan keeps the proposed procurement of 1,050 Javelin and 1,545 TOW-2B anti-tank missiles, totaling NT$11.8 billion and NT$11.1 billion, respectively. This is alongside a separate anti-armor unmanned aerial missile program, which is assumed to be ALTIUS systems, capped at NT$34.7 billion. An additional NT$88.1 billion is reserved for other urgently needed items deliverable within three to five years, provided they are individually specified and do not duplicate annual defense programs.
| DPP/MND Proposal | TPP Proposal | |
| “Precision artillery” | 60 M109A7 Paladin self-propelled howitzers w/ 4,080 precision-guided munitions | Included, capped at NT$126.7 billion |
| 60 M992A3 ammunition vehicles | ||
| 12 M88A2 Hercules recovery vehicles | ||
| “Long-range precision strike missiles” | 82 M142 HIMARS multiple-launch rocket launcher systems | Included, capped at NT$127.6 billion |
| 1,203 Guided Multiple Launch Rocket System pods | ||
| 420 ATACMS missiles | ||
| “Unmanned vehicles and their countermeasures systems” | 1,554 ALTIUS-700M loitering munitions | Only ALTIUS systems included, capped at NT$34.7 billion |
| 478 ALTIUS-600ISR surveillance drones | ||
| 200,000+ drones | ||
| 1,000+ unmanned surface vessels | ||
| “Air defense, anti-ballistic missile and anti-armor missiles” | 1,050 FGM-148 Javelin anti-armor missiles w/ 70 launchers | Included, capped at NT$11.8 billion |
| 1,545 BGM-71F TOW-2B anti-armor missiles w/ 24 launchers | Included, capped at NT$11.1 billion | |
| “AI-assisted and C5ISR systems” | AI decision-support systems | None |
| Tactical communications networks | ||
| Rapid intelligence-sharing kits | ||
| “Enhancing sustained combat capacity equipment” | Domestic production lines and stockpiles for 105mm & 120mm tank rounds, 30mm autocannon rounds, 155mm artillery & grenade munitions | None |
| Domestic production lines for chemical protective masks, night-vision goggles, and armored vehicles, and mobile barrier equipment | ||
| “Equipment and systems jointly developed and procured by Taiwan and the United States” | Included, unknown quantity | None |
Infrastructure and Technology
In addition to hardware and weapons systems procurement, the DPP proposal emphasizes investments in infrastructure and integrated technology. Funding is included for “tactical mission networks,” which link units across dispersed battlefields, enable real-time data sharing, and integrate AI decision-support systems to assist operational commanders. The proposal also strengthens digital resilience by establishing redundant, protected communication networks to ensure command and control functions remain operational under contested or degraded conditions. Strategic communications capabilities are expanded across terrestrial, aerial, and satellite networks to maintain secure and continuous information flow. Early warning systems incorporate unmanned vehicles and sensor platforms to detect potential threats and transmit real-time intelligence. Hardened basing initiatives improve the protection of key command facilities, including shielding against missile strikes and electromagnetic pulse effects. These elements support the DPP’s operational objectives of command, control, and decision support and, in particular, enhancing operational resilience across the defense system.
On the other hand, the TPP proposal adopts a narrower approach focused on immediately deliverable capabilities and does not fund any of the above programs. The TPP proposal emphasizes platform-centric and hardware-focused defense measures rather than multi-domain technological integration. While it provides rapid acquisition of ground-based strike and anti-armor systems, it does not include the networked architecture, sensor integration or protected command infrastructure envisioned in the DPP proposal.
Personnel and Sustainment
Beyond infrastructure and technology, the two proposals also differ in their approach to personnel and sustainment, focusing on the support required to operate and maintain procured systems. The DPP proposal includes training tied to the operation of artillery, missile, and unmanned systems, but does not fund separate training units or simulation centers. Life-cycle support is provided within procurement categories and may cover pre-paid technical support, repair kits, and system-specific overhauls. Spare parts are included only as required for the acquired equipment, without establishing centralized pools for aircraft, armored vehicles, or naval engine turbines. Repair depots and maintenance infrastructure are referenced in connection with equipment sustainment, with no dedicated funding for depots, hardened workshops, or automated repair facilities. Strategic ammunition is purchased alongside the weapons systems, rather than as a separately authorized stockpile. Industrial base support is limited to domestic production and development associated with specific procured systems, with no independent funding for broader defense industrial expansion or research and development.
In contrast, the TPP proposal provides only the minimal sustainment necessary to operate the procured systems. Training, life-cycle support, spare parts, repair depots, strategic ammunitions, and industrial base development are largely omitted or limited to what is immediately required for the specific equipment acquisitions, included as part of FMS cases. Broader sustainment measures, including depot construction, centralized parts pools, or strategic stockpiles, remain the responsibility of the regular annual defense budget. Industrial base engagement is confined to the basic procurement compliance and cooperative requirements, without separate funding for domestic production capacity. In practice, the TPP proposal prioritizes rapid acquisition and legislative oversight over embedded operational support. In contrast, the DPP proposal incorporates limited sustainment elements to ensure ongoing operational readiness of the procured systems.
Conclusion
The major differences between the two special defense budgets center around flexibility and holistic spending, as opposed to narrower and targeted procurements of established systems. The inclusion of funding for newly announced HIMARS and Javelin sales from December in the TPP proposal indicates at least some level of good-faith bargaining for weapons, apart from Paladins, that are asymmetric in nature. Increased oversight provisions are beneficial for open-source monitoring, such as our work, but conflict with the Lai administration’s preferences, and constitutional issues surrounding Lai himself reporting to the LY. It is clear that those provisions, more than anything else, will be one of the biggest budget battles in the near future.
As of the time of writing, the LY is set to reconvene on February 24, with Speaker Han Kuo-yu indicating that the competing special defense budget proposals will be the “very first” items to be considered by the legislature. It is assumed that other proposals will emerge, or the two proposals will change, and we await the outcome of the LY’s deliberations.