Display Taxonomy Terms in an option tag with value being the slug

Use get_terms and output the term objects within whatever markup you need:

$terms = get_terms( 'your-taxonomy' );

if ( $terms ){

    echo '<select>';

    foreach ( $terms as $term ) {
        echo '<option value="' . $term->slug . '">' . $term->name . '</option>';
    }

    echo '</select>';

}