The government of the Qing Dynasty was the first in the history of Taiwan to monopolize the sales of camphor followed by salt, opium, sulfur, coal, and gold. At that time, there was no monopoly system for either tobacco or alcohol, and due to poor administrative management, until Taiwan was ceded to Japan in the Sino-Japanese War of 1894-1895, only salt and sulfur remained in the monopoly system. 

Once occupied, the Japanese government found the need for colossal funding for infrastructure constructions to achieve the goal of self-sufficiency of the colony. It monopolized a list of commodities as part of annual revenue. The monopoly system accounted for an average of 17.5% of the annual revenue in Taiwan, and it even peaked at nearly 30% of the total, marking it an important financial pillar of the government.

During the Japanese-occupied period, the first monopoly product was opium, followed by salt, camphor, tobacco, liquor, beer, anhydrous alcohol, weighing instruments, matches, and petroleum. Except for salt, liquor, camphor, and beer, which were allowed to be produced by the private sector, the production and sales of other monopoly products were exclusively controlled by the government.

The management of the Monopoly Bureau was mostly Japanese, and there were fewer than 10 Taiwanese who were promoted to technician or appointed as an officer until the end of World War II. The salary structure of the employees varied by nationality, despite their having the same work, which revealed the true colonial nature of the authority. 

In 1945 after Taiwan’s restoration, the continued existence of the monopoly system was debated. But, since Taiwan was devastated from the war and was in desperate need of re-construction, which required a great deal of money, the Taiwan provincial administrative executive office requested to the central government to maintain the system and suggested reducing monopoly products to include only tobacco, alcohol, camphor, matches, and weighing instruments. In November, the government took over the “Monopoly Bureau of Taiwan Government-General” and changed the name to the “Monopoly Bureau of Taiwan Provincial Government,” as well as accepted its relevant companies and production plants. 

In February of 1947, the Monopoly Bureau banned the sales of illicit cigarettes, which triggered the “February 28 Incident.” After the incident, the National Government reorganized the Taiwan provincial administrative executive office into the Taiwan Provincial Government. On May 23 of the same year, Wei Taoming, the chairman of the Provincial Government, proposed at the second committee meeting to transform the Monopoly Bureau into an authority of franchise and kept the business of tobacco and alcohol, including production, transportation, sales, and development, under government control. On May 26, Tsai Hsuanfu, the first director of the Taiwan Tobacco and Wine Monopoly Bureau, reported to duty, and this date was dedicated for the celebration of its establishment. 

As the central government moved to Taiwan in 1949 and found the fiscal revenue in rapid decline, the monopoly sales of tobacco and alcohol became a primary source of revenue for the National Treasury, for which during this time of fiscal deficit, all earnings from the monopoly sales had to be submitted to the Treasury every day to relieve the urgent need of revenue, which truly reflected the uncomfortable national financial status at the time. 

Taking 1951 as an example, the profit earned from monopoly sales was NT$270 million, accounting for 48% of total sales. The amount grew to more than NT$7.63 billion by 1973, accounting for 12.57% of the national tax revenue, showing its substantial and long-term contribution to the national finance. However, due to many restrictive measures imposed by the government on the advertisement of tobacco and alcohol, the Bureau devoted more effort into research and development for better-quality products to help establish a good market reputation. 

In May 1997, the Bureau compiled the “Chronicle of Taiwan Tobacco and Wine Monopoly Bureau,” which introduced the monopoly system and described the evolution of the organization, as well as their work, including raw material procurement, production, sales, public works, accounting, research and development, management system, issued decrees, and the history of directors, as this document would serve as an important reference for understanding the historical evolution of the Bureau.