In February our Minister of Finance, Enoch Godongwana, held the 2022/23 budget speech and I would like to cover what I would think are the main points to us as investors. We don't need to really focus on all the stuff the economists get excited about, what's important to us is how much more money we are going to have in our back pockets at the end of the day and any future trends that might make our lives better.
One of the pieces that are most important to note in the budget speech was an amendment made to regulation 28. Regulation 28, governs what we can invest in, in retirement funds, it determines how much we can invest in cash, bonds, property, shares, and offshore. The offshore limit that regulation 28 enforced up until now was 30%, as of March 2022 that limit has increased to 35%. While a 5% increase might not sound like a big number, the reality is that it is a massive relaxation in exchange controls, because the biggest amount of savings in South Africa is in retirement funds. I think that this is a great move by our minister, it is a great signal for investors and it shows that the current regime has really got their eyes focused on the right things.
Another great signal was the decrease in company tax rates from 28% to 27%, again, it might not sound like a big number but just think about the signal that it is sending to business. It is saying to business, we value the business sector, we know business needs to make more money/profits so that they can create bigger dividends and those are all great signals. It has gone from maybe 5 or 10 years ago where business was seen as the enemy and it was all about the state, making the state bigger and making the state-owned enterprises bigger to now saying we know now as a government that employment is going to be created by business and business is the area that is going to drive the economy and governments job is to facilitate business to do that.
The minister was in pains to speak about the fact that company tax and income tax rates in South Africa were very high, he almost hinted that he thinks they are too high. So we could see at some point in the future a decrease to company tax rates even more and I think a decrease to personal income tax as well, what it requires though is for the economy to start growing.
We were very lucky as a country over the last couple of years that we had a lot more money as a country from mining because the mining sector has been doing very well and commodity prices are at an all-time high. This is great and for example, in the last tax year, we got an extra R180 billion worth of income earned through taxes from the mining houses. Another great positive from this was that the government used 45% of that extra money to settle debt early and that is great personal finance behavior.
The government was under huge pressure to increase social spending, in other words, to increase social grants and allocate more money towards those grants, beyond inflation, and they didn't do that. I think that this shows that this government has got a lot of focus on fiscal discipline and although our government debt levels are very high what we seeing is that the trajectory of that debt is going in the right direction.
I am very happy with the budget, I think that it was a very difficult budget, because the economy is really struggling, COVID was a huge blow to the economy. To use any kind of bonuses to pay off debt quicker was really good and if we can see future decreases in our tax rates, it will have a huge economic impact.