"If nothing changes, we won't be submitting an entry," he told Reuters at the Spanish Grand Prix when asked about a May 29 deadline.
"But I don't think that is a unique opinion among other competitors."
Howett is vice-chairman of the Formula One Teams' Association (FOTA) presided over by Ferrari's president Luca di Montezemolo, a firm critic of the governing body' plans to introduce an optional 40 million pound ($60.19 million) budget cap in 2010.
The International Automobile Federation (FIA) want the cap to encourage new teams to enter and also keep the existing 10 teams on the starting grid after Honda's abrupt departure last December.
The plan would allow capped teams to operate with far greater technical freedom than those continuing with unlimited budgets.
Montezemolo has warned it would create a two-tier championship that could be "fundamentally unfair and perhaps even biased".
The FIA set the deadline last week when the regulations were published and said all teams wishing to compete in 2010 must state whether they wanted a cap or not.
Job Losses
Howett said Cologne-based Toyota, who have yet to win a race since their debut in 2002 despite having an annual budget estimated at around $300 million last year, wanted a level playing field.
"I think it's very clear that with a double tier championship, you have to go for the 40 million cap because the (capped) cars will be quicker," he said.
"As a corporation it's not only budget, its about the value of Formula One. And we think the double tier series is not the right direction."
Howett said Toyota were concerned that the correct procedures should be followed.
"The regulations were announced but if you read the regulations, there is a proper process that should be followed and our understanding is that that hasn't been done," he said.
"There are a number of issues that need to be clarified before we can enter."
FOTA met to discuss the situation last Wednesday and called for urgent talks with the governing body, whose president Max Mosley abandoned plans to attend the Spanish race after the death of his son Alexander last week.
Howett said Toyota, who also provide Williams with engines, would like to remain in Formula One but had alternatives.
"We have social issues with our people," he said. "A 40 million budget means that we would have to make a huge number of people redundant.
"And there are other categories that we could consider where we may be able to operate in a completely different manner.
"We would love to stay here and we want to compete in the premier level of motorsport. But I think it has to be said that given the current situation as we stand today, it is impossible to submit an entry."
Howett said FOTA had taken huge steps to agree cost cuts among the teams and pointed out that the cap would still involve considerable additional expense for teams since drivers salaries and hospitality were not included.
"We welcome, as Toyota and as FOTA, new entrants," he said.
"It's purely that faced with the current situation, very simply we can't enter."
The Briton could not be sure that the situation would be resolved satisfactorily. "It's beyond our control," he said. "I used to believe that common sense would prevail, but I have to say that I'm becoming more pessimistic that it does."
