ISLAMABAD, June 19 -- The Senate Standing Committee on Finance has approved a proposal to impose penalties on taxpayers who falsely claim excessive tax credits in their income tax returns, as authorities move to tighten tax compliance measures.

During a committee meeting, officials from the Federal Board of Revenue (FBR) informed lawmakers that individuals found claiming tax credits beyond their entitlement would face a penalty equal to the amount of the excess credit wrongly claimed.

The committee also reviewed proposals related to the Active Taxpayers List (ATL), with FBR officials suggesting that taxpayers who fail to meet filing requirements within the prescribed timeline should not be included in the list.

Officials further propos...