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Facing China’s Military Threats, Taiwan Considers War Tax for Defense Funding

Daniel Kim Views  

May have experienced the need to enhance the preparation for war 
Planning to prepare war expenses via financial war game 
Considering the control of foreign exchange 

In light of China’s recent, almost daily displays of military power, Taiwan appears to be considering introducing a war tax to bolster its defense budget, implementing China’s intensified pressure on the island. Actualization of counteracting in the Taiwan Strait is becoming even more non-negligible.


Taiwanese soldiers are undergoing intense training in preparation for a potential Chinese invasion. The fact that they are considering a war tax indicates a heightened sense of crisis/Taiwan Lianhebao.
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According to diplomatic sources in Beijing on the 21st, Taiwan’s Finance Minister, Zhuang Cuiyun, stated during a legislative interrogation that they are considering tax increases as part of war funding. She also mentioned that they conducted financial war games in October and December last year in preparation for a potential war between China and Taiwan.

According to Minister Zhuang, the Finance Ministry discussed war funding, mobilization of assets, foreign exchange control by the central bank, and quick customs clearance for military supplies during these financial war games. She emphasized that legislative processes must precede the implementation of related policies, including tax increases and cost hikes for national treasury stability and operation in the event of war.

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About this, Liu Dehai, an honorary professor of diplomacy at Zhengzhou University, expressed, “There is a surplus of $88 billion or about 10% up to the long-term debt issuance limit of 40.6% of Taiwan’s GDP. I believe issuing national bonds is the quickest way to secure war funds.” He further projected that if the funding is insufficient, raising the distribution limit to 60% could allow supplying 7 to 8 trillion Taiwan dollars in national bonds.

From 1955 to 1989, Taiwan imposed a labor and military special donation of 0.5 Taiwan dollars per U.S. dollar on non-essential imported goods for foreign exchange payments. This was essentially a war tax. It’s safe to assert that the likelihood of the war tax being implemented is considerably high.

Since Tsai Ing-Wen, president of the Taiwan independence-leaning Democratic Progressive Party, took office in May 2016, China has virtually severed official relations with Taiwan. The military pressure on Taiwan has been intense and unparalleled since Lai Ching Te, vice president of the same party, won the presidential election on January 13. It’s safe to assert that Taiwan’s consideration of a war tax is entirely understandable.

Daniel Kim
content@viewusglobal.com

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