Tags are descriptive keywords that help viewers find your videos on YouTube. According to YouTube, the tags (along with video’s title, thumbnail, and description) are the important piece of metadata you need to provide, in order to boost your video’s rank in YouTube search results.
In other words, tags help YouTube to better understand your video’s topic, associate it with similar content, and include it into relevant searches, which helps you to reach new viewers and grow your subscriber base. This is essential for monetized channels when your revenue directly depends on growing the views and subscribers.