Here’s a dynamic way to allow an EC2 instance to modify its own tags, but no other instance’s. Enjoy.

{
  "Version": "2012-10-17",
  "Statement": [
    {
      "Effect": "Allow",
      "Action": ["ec2:CreateTags", "ec2:DescribeTags"],
      "Resource": "*",
      "Condition": {
        "StringEquals": {
          "aws:ARN": "${ec2:SourceInstanceARN}"
        }
      }
    }
  ]
}