China claims Taiwan is part of its territory and has not ruled out using force to bring the self-ruled island under its control.
The law previously did not specify the exact amount for allowances.
“The armed forces are facing new types of operational needs... allowances should be increased to reflect the sharp rise in unit duties and training frequency,“ the KMT said in the document outlining the proposed changes.
Other changes passed by lawmakers Tuesday were for conscripts to receive no less than the minimum wage, additional pay for combat units and overtime.
Premier Cho Jung-tai, who belongs to the ruling Democratic Progressive Party, said the government would challenge the amendments after the cabinet was not consulted as required by the budget act.
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