Problem with the rank condition

[jpfeifer]

I agree with @eisamabodian. Sometimes it is a parameter issue. See e.g.

Colinear variable SOE model

It’s recommended to simplify the model for debugging. In your case, it may either be a timing issue or a parameter problem, most likely related to fiscal rules. Have you tried what happens with lump sum taxes? Note that a unit root in the nominal exchange rate may not be a problem.