There are some benefits to microchipping your dog that using a dog tag with a collar does not provide. First off collars can get taken off while your dogs microchip cannot. If your dog is stolen a collar could easily be removed and it would be more difficult to confirm that your dog is actually your dog.
If there is a storm and your dog takes off your dog could end up at a shelter hundreds of miles away that you haven’t called so they wouldn’t know your dog is missing. If your dog is microchipped you could call the microchip company and let them know that your dog is missing so it is in their database when the dog is scanned by a microchip reader.
Shelters scan dogs when they come in to ensure that they are not lost or missing. If your dog ends up in a shelter they would have the information to contact you if they have your dog.
Finally microchipping your dog is an inexpensive way to ensure that your dog has a permanent id that can’t be removed.