Translation:It says to add salt and pepper to taste.
I'd say the latter. It means to add as much salt and pepper as is your taste; if you don't like pepper you can leave it out, if you like spicy food you can put in a lot, and so on. Check out http://www.thekitchn.com/food-science-salting-to-taste-49868
The most common way to express the thought in Italian recipes is "quanto basta", or simply q.b. (as much as needed).