Drivers should be given "five minutes grace" after their parking tickets expire before facing fines, MPs on the Commons transport committee say.
It also said councils in England should publish annual parking-charge accounts if they want to prove they are not being used as a "cash cow"
The Transport Committee warned it was "neither acceptable nor legal" to use fines to increase revenue.
Councils made a surplus of hundreds of millions of pounds each year, it added.
The MPs urged ministers to freeze charges, currently capped at £130 in London and £70 outside. Councils said money raised went back into services.
Committee chairman, Labour MP Louise Ellman, said: "There is a deep-rooted public perception that parking enforcement is used as a cash cow, so it's essential that local authorities apply stringent transparency."
'Hard to justify'The report said the Local Government Association had calculated a surplus from on- and off-street parking of £411m in 2011/12, while the RAC Foundation put the figure at £565m.
The maximum fixed penalty for speeding is £60, unless the case is referred to court.
Mrs Ellman argued the charging system was perverse, saying: "Annual parking accounts would allow the public to see how much local revenue is derived from the enforcement of fines, and what proportion of this come from on- or off-street parking charges.
"It's right that parking charges be determined locally, but hard to justify fines that substantially exceed penalties for more serious offences like speeding.
"Central government should freeze the maximum penalty charge and develop differential fines for less serious parking violations. "
Mrs Ellman also said the Department for Transport's rules for councils should include a five-minute "grace-and-favour" period after tickets expire before imposing a fine.
A government spokesman said: "We welcome this report, which strengthens the case for changes to be made to parking rules.
"The law is clear. Parking is not a tax or cash cow for local councils. This government is reining in over-zealous parking enforcement and unfair parking practices, with the levels of parking penalty charges being kept under review."
But Peter Box, chairman of the Local Government Association's economy and transport board, said: "As this report recognises, parking controls are not being used by councils to raise revenue. They are essential for keeping motorists and pedestrians safe, traffic flowing and ensure people can park near their homes and local shops."
He added: "Councils always look to be open and transparent with residents on their parking policies.
"Any income they make from charges and fines is spent on running parking services, fixing potholes and providing subsidised travel to children and the elderly."
Last month, the government said it was considering banning fixed cameras and so-called "spy cars" used by councils to catch people parking illegally.
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