How to display favicon on my Safari Tab?

This is not possible with current version of Safari 9 or 9.1.

If, like me, you do really want this feature, please use Apple Safari feedack form to send feedback to Apple.

They do listen to customer feedback, I can assure you, and when it comes to features like this, the number of requests is essential.

There now is a solution to this: I have created Faviconographer, an app that will overlay Favicons for Safari tabs. It's still a workaround compared to a native Safari feature, but it works surprisingly well.

Safari 10.0.2: favicons are shown when pinning the tab.

This answers your original question, even though is not what you wanted to ask :)

As of Safari 12.0 it's now possible. In Preferences, you can now show favicon in the new Tabs settings:

Show website icons in tabs