Two-thirds of Swiss voters rejected a referendum Sunday to tighten a smoking ban, to the relief of hotels and restaurants, while two cantons split in a vote over keeping tax breaks for rich foreigners.

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On the smoking ban, only Geneva voted slightly in favour of tougher controls, while results from the country's other 25 cantons showed that 66 percent rejected it, the ATS news agency reported.

The Swiss Business Federation called it a "heartening" result, saying the stricter laws would have been a burden on the economy, especially the restaurant sector.

"The initiative would have imposed more costs on restaurateurs who have already made considerable investments to protect non-smokers," it said in a statement.

Hotelleriesuisse, representing the hotel sector, said it was relieved by the outcome, adding that a "yes" vote would have made "some investments obsolete"

The referendum had asked voter whether to strengthen a smoking ban in indoor workplaces and public spaces.

The Socialist party "deplored" the result, saying stepping up protection against passive smoking would have "incontestably been a major step in the improvement of (workers') conditions".

Opinion polls had shown the country deeply divided on the eve of the referendum over the initiative by the Swiss Pulmonary League, which aimed at clearing up confusion about the current law and claimed that working an eight-hour shift in a smoke-filled environment is equivalent to smoking 15 to 38 cigarettes.

Switzerland introduced a federal ban on smoking in enclosed workplaces and public spaces more than two years ago, but the law allowed for a number of exceptions and has been applied unevenly across the country's 26 cantons.

And in another referendum held in just two cantons, Swiss voters were divided over a proposal to abolish special tax breaks for rich foreigners, with Basel-Landschaft approving it but the expat haven of Bern rejecting it.

While Basel-Landschaft canton voted "yes" to stamping out the tax privilege, only a handful of expats residing there benefit from the tax break, so the new rules will have little impact.

But in Bern canton -- which includes the ski resort of Gstaad, a renowned playground for wealthy expatriates -- 66.5 percent of voters opposed scrapping a system under which foreigners pay a lump-sum tax on the basis of their spending in Switzerland, instead of their earnings.

Still, a slim majority approved tightening the tax break, notably by setting a minimum tax amount at 400,000 Swiss francs (330,000 euros, $430,000).

In 2010, the number of so-called "tax refugees" in Switzerland taking advantage of the system stood at 5,445 and they paid 668 million Swiss francs in taxes, or an average of a little over €120,000 each.

Most of the Bern canton's expats who benefit from the system -- including French rocker Johnny Hallyday and French-Polish film director Roman Polanski -- live in Gstaad, a ritzy village dotted with luxury chalets.