How to remove skin tag on penis safely?

Skin tag or wart? Either can be removed by laser or surgical excision, but i would recommend evaluation. Genital warts are transmissible to your partner. There are also some creams that can be used to remove warts non-surgically.
Local excision. Most skin tags can be removed easily and painlessly with minimal scarring.. This is accomplished with local anesthesia in the office.
See a urologist. Especially if you at risk for infections (eg dm/on steroids/...) you should be evaluated by a licensed urologist to have the lesion removed carefully. If there is any question of malignancy or transmitability, a specimen should be evaluated by a pathologist. Obviously benign lesions cab be cauterized, "frozen" cryo-therapy (liquid nitrogen) or chemically removed.