But, much to parliament's relief, it was the public who had the last say in the matter and they too voted resoundingly against the idea. In a nationwide vote cast on Sunday, a majority of 70 per cent of the voters elected against the proposed 20 per cent tax on capital gains above SFr5,000 (US$3000), which leaves just Switzerland and Greece as the only two industrialised countries not to impose such a tax.

Bitterly disappointed with the result is Switzerland's Trade Union Federation which called for the tax to be imposed on the basis that it was unfair that many wealthy taxpayers have been allowed to escape paying their taxes.

However, the Swiss banking industry welcomed the rejection of the capital gains tax saying that it would strengthen Switzerland's standing as a major international financial centre and save SMEs from a heavy tax burden. The Swiss business federation described a tax on capital gains as unnecessary because there was already a wealth tax in place.

Jean-Christian Lambelet, professor of economics at Lausanne University, told the Swissinfo news agency: 'We have a wealth tax in Switzerland, unlike in most other countries, so there is really no reason to tax capital gains. Strictly speaking, capital gains are a form of income… but if you tax capital gains then you should be able to deduct capital losses, which was allowable under the initiative but only to a small extent.'