As noted, under- and unreported barter transaction values are the specific mechanisms for tax evasion. When companies do pay their tax liabilities, they use barter again. According to the report of the Inter-Ministerial Balance Sheet Commission, headed by Petr Karpov, the largest companies in Russia pay 80 percent of their taxes, but only 8 percent of this amount is actually in the form of cash. Price distortions result because complicated webs of barter transactions make it difficult to accurately quantify the value of inputs. If costs are unknown, then prices are arbitrary.
Individual circumstances determine the price set at each barter transaction.
Non-viable companies that continue operations under the barter system negatively affect viable companies by oversupplying products in the market, without regard for supply, demand, or price. This makes it difficult for firms trying to operate through market mechanisms to produce and sell comparable goods. Barter and arrears obfuscate economic statistics. Clifford Gaddy and Barry Ickes write that Russian economic output is exaggerated by a factor of two to three due to barter transactions. The point is that policymaking is hindered in such a context.